What is 'Bamboo Network'

The Bamboo Network is a network of expat-Chinese businesses in Southeast Asia. These companies are usually mid-sized and family-owned, with links to the economy of Greater China.

BREAKING DOWN 'Bamboo Network'

The Bamboo Network is mostly concentrated in large metropolitan areas, such as Hong Kong, Macau and Taipei, Taiwan, as well as Manila, Jakarta, Singapore, Bangkok, Kuala Lumpur and Ho Chi Minh City. The term was coined to conceptualize connections between businesses operated by the Overseas Chinese community in Southeast Asia. The Overseas Chinese business networks constitute the single most dominant private business groups outside of East Asia.

Ethnic Chinese play a leading role in Southeast Asia's business sector as they dominate Southeast Asia's economy today and form the economic elite across all the major Southeast Asian countries. The Chinese have been an economically powerful and prosperous minority than their indigenous Southeast Asian majorities around them for hundreds of years and today exert a powerful economic influence throughout the region.

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.

History of the Bamboo Network

As Chinese communities flourished in Southeast Asia under European colonialism, Chinese merchants and traders began to develop elaborate business networks for growth and survival. These elaborate business networks provide the resources for capital accumulation, marketing information, and distribution of goods and services between the Chinese business communities across Southeast Asia. 

Structure of the Bamboo Network

Overseas Chinese businesses in Southeast Asia are usually family owned and managed through a central bureaucracy. The family is central to the firm's business activities and provides the capital, labor, and management. The strength of the family ownership model and operation lies in its flexibility of decision-making and the dedication and loyalty of its labor force. Managing the businesses as family businesses effectively lowers front office transaction costs, as they are passed down from one generation to the next. Many firms generally exhibit a strong entrepreneurial spirit, family kinship, autocratic leadership, intuitive, parsimonious, and fast decision-making style, as well as paternalistic management and a continuous chain of hierarchical orders. The bulk of these firms typically operate as small and medium-sized businesses, instead of large corporate conglomerate entities typically dominant in other East Asian countries, such as Japan and South Korea.

Trade and financing operations are managed by extensions of traditional family clans, and family and personal relationships are prioritized over formal relationships. This arrangement promotes commercial communication and higher liquidity of capital in a region where financial regulation and rule of law remain largely undeveloped in Southeast Asia.

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