Bamboo Network

What Is the Bamboo Network?

The term "bamboo network" refers to a web of business ties between companies owned by ethnic Chinese families or Chinese expatriates in Southeast Asia. The majority of these businesses are found in large metropolitan areas such as Hong Kong, Singapore, and Kuala Lumpur. These companies are usually established, mid-sized, and family-owned, and are linked to the economy of Greater China.

Key Takeaways

  • The bamboo network is a system of informal business ties between family businesses owned by Chinese expatriates or ethnic Chinese businesspeople.
  • Many of the businesses in the bamboo network are based in cities with large Chinese populations, such as Hong Kong, Singapore, Bangkok, or Kuala Lumpur.
  • Bamboo network businesses are typically family-owned and held together by filial loyalty as well as employment ties.
  • The strength of the bamboo network is particularly significant in Southeast Asia, where three-quarters of the billionaire wealth is held by ethnic Chinese people.


Understanding the Bamboo Network

The term "bamboo network" was coined to conceptualize connections between businesses operated overseas and ethnic Chinese people throughout the world. It does not have any formal membership or organization; instead, it refers to an informal system of family ties, personal relationships, and guanxi.

Much of the bamboo network is centered around Southeast Asia, where the Chinese have been an economically powerful and prosperous minority for hundreds of years. Today, China exerts a powerful economic influence throughout the region.

The concept of the bamboo network goes back to the period of European colonialism in Southeast Asia. During this period, Chinese merchants and traders moved beyond the country's borders, setting up shops in other countries like Thailand, Vietnam, Singapore, and Malaysia. As these communities began to thrive, they started to develop their own business networks—complete with marketing, capital, and a way to distribute goods and services among each other throughout that part of the continent.

Today's bamboo network is now mainly concentrated in large metropolitan areas such as:

  • Hong Kong
  • Macau
  • Taipei
  • Manila
  • Jakarta
  • Singapore
  • Bangkok
  • Kuala Lumpur
  • Ho Chi Minh City

Since the turn of the 21st century, post-colonial Southeast Asia has become an important pillar of the overseas Chinese economy, as the bamboo network represents an important symbol manifesting itself as an extended international economic outpost of China.

The bamboo network refers to a set of informal business ties, rather than an organized network.

Size of the Bamboo Network

Given the informal nature of these business relationships, it is difficult to place exact figures on the size and extent of the bamboo network. However, there is little doubt that Chinese businesspeople play an outsized role in the economies of Southeast Asia, particularly Singapore, Thailand, the Philippines, and Indonesia.

This success has been widely attributed to Confucian values of thrift and hard work, combined with filial loyalties that made it difficult to break up family fortunes and costly to break business ties. The success of ethnic Chinese entrepreneurs became even more pronounced in the 1990s, when China's opening economy provided new opportunities to overseas traders. According to some estimates, by 1998, the Chinese communities of Southeast Asia had a combined population of 55 million, but a combined net worth of over $600 billion.

By 2019, the Economist Intelligence Unit estimated that three-quarters of the billionaire wealth in Southeast Asia was held by ethnic Chinese, who comprised only 5% of the population. This influence was particularly pronounced in Thailand, where twenty of the country's 31 billionaires were ethnic Chinese. In Singapore, a country with 22 billionaires, 20 were ethnic Chinese.

75%

By some estimates, three-quarters of the billionaire wealth in Southeast Asia is controlled by ethnic Chinese entrepreneurs.

Special Considerations

Family plays a particularly important role in Chinese businesses including those in Southeast Asia. Businesses are generally family-owned and operated, with the unit providing the majority of the capital, labor, and management needed to make them run. Because they are family-run businesses, these companies have no problems with loyalty, low overhead, or flexibility.

Businesses in the bamboo network are primarily small or mid-sized, but some have amassed billionaire fortunes. The leadership style of these businesses tends to be authoritarian, with the founder heading up the chain. The leader generally has a moral authority, so there are usually very few issues from those who are subordinate.

Family relationships, as well as those with people and entities that are close to the family, are valued over traditional business relationships. This makes financing and trade activity much easier. Since these are family-run enterprises, there's much more at risk, which is why communication between families and clans becomes much more important.

Article Sources

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  1. Harvard Business Review. "The Worldwide Web of Chinese Businesses." Accessed Oct. 24, 2021.

  2. Harvard Business Review. "The Worldwide Web of Chinese Businesses." Accessed Oct. 24, 2021.

  3. The Economist Intelligence Unit. "Governance and Succession: Family Offices and the Chinese Diaspora in Asia," Pages 9-10. Accessed Oct. 24, 2021.