The term "bamboo network", or the Chinese Commonwealth, is used to conceptualize connections between certain businesses operated by overseas Chinese in Southeast Asia. It links the overseas Chinese community of Southeast Asia (Malaysia, Indonesia, Thailand, Vietnam, the Philippines, and Singapore) with the economies of Greater China (mainland China, Hong Kong, Macau, and Taiwan). Overseas Chinese companies have a prominent role in the private sector of Southeast Asia, and are usually managed as family businesses with a centralized bureaucracy. The Indian essayist Pankaj Mishra, writing in The New York Review of Books, dubbed the bamboo network as "the greatest Asian economic power outside of Japan."

1. BAMBOO
NETWORK

2. INTRODUCTION
1. The term "bamboo network", or the Chinese
Commonwealth, is used to conceptualize connections
between certain businesses operated by overseas
Chinese in Southeast Asia.
2. It links the overseas Chinese community of Southeast
Asia (Malaysia, Indonesia, Thailand, Vietnam, the
Philippines, and Singapore) with the economies of
Greater China (mainland China, Hong Kong, Macau,
and Taiwan).
3. Overseas Chinese companies have a prominent role
in the private sector of Southeast Asia, and are
usually managed as family businesses with a
centralized bureaucracy.
4. The Indian essayist Pankaj Mishra, writing in The New
York Review of Books, dubbed the bamboo network
as "the greatest Asian economic power outside of
Japan."

3. STRUCTURE
1. Chinese businesses in Southeast Asia are usually family
owned and managed through a centralized bureaucracy.
2. These firms are typically mid-sized corporations, rather
than large conglomerates like those dominant in Japan.
3. Trade and financing is guided by family ties and personal
relationships are prioritized over formal relationships.
4. This promotes commercial communication and a faster
transfer of capital in a region where financial regulation
and rule of law remain undeveloped.
5. These relationships are based on the concept of guanxi,
the Chinese term for the cultivation of personal
relationships.
6. Much of the business activity of the bamboo network is
centered in the major cities of the region, including Hong
Kong and Taipei in the Greater China region and Jakarta,
Singapore, Bangkok, Kuala Lumpur, Ho Chi Minh City, and

4. HISTORY
1. The origins of the bamboo network can be traced to
the 16th century, when Chinese migrants from
southern China settled in Indonesia, Thailand, and
other Southeast Asian countries.
2. They founded at least one well-documented republic
as a tributary state of Qing China — the Lanfang
Republic that lasted from 1777 to 1884.
3. Chinese populations in the region saw a rapid
increase following the Communist victory in the
Chinese Civil War in 1949, which forced many
refugees to emigrate outside of China.
4. The bamboo network has been heavily influenced by
Confucianism, a philosophy developed by Confucius
in the 5th century BC that promotes filial piety and
pragmatism.

5. 1997 ASIAN FINANCIAL
CRISIS
1. Governments affected by the 1997 Asian financial
crisis introduced laws regulating insider trading,
weakening the influence of the bamboo network.
2. After the crisis, business relationships were more
frequently based on contracts, rather than the
trust and family ties of the traditional bamboo
network

6. 21ST
CENTURY
1. Following the Chinese economic reforms initiated by
Deng Xiaoping during the 1980s, businesses owned by
the Chinese diaspora began to develop ties with
companies based in mainland China.
2. Bamboo network businesses invested heavily in China,
influenced by existing cultural and language affinities.
3. China's transformation into a global economic power in
the 21st century has led to a reversal in this
relationship. Seeking to reduce its reliance on United
States Treasury securities, the Chinese government
shifted its focus to foreign investments.
4. Protectionism in the United States has made it difficult
for Chinese companies to acquire American assets,
strengthening the role of the bamboo network as one of
the major recipients of Chinese investments

7. WHAT ACTUALY IS BAMBOO
NETWORK?
1. The bamboo network refers to the conglomerates
propelling Southeast Asian economies which started
as small family businesses run by overseas Chinese.
2. The businesses are managed by the family of the
founder, and are run with strong Confucian values.
3. The combined output of the 55 million overseas
Chinese is equal to a good-sized country, or close to
$600 billion.
4. Chinese expatriate workers are integral to economic
success in countries such as Singapore, Thailand,
Malaysia, Indonesia, Taiwan, Hong Kong, the
Philippines, and Vietnam.

8. WHAT ACTUALY IS BAMBOO
NETWORK?
1. Most of these conglomerates are started by Chinese
expatriates who move country and start out with little
or no savings, work hard and earn enough to start
their own businesses, and constantly reinvest to
maximise their cash.
2. Typically, a successful family will own many
businesses spread over a number of countries.
3. Control of the business is general passed from
generation to generation, and since for the most part
the receivers of the business have already had an
active managerial role, the transitions tend to be quite
smooth, as opposed to the western idea of a big
takeover with sweeping changes and redundancies all
round.

9. EXAMPLE OF BAMBOO
NETWORK
Li Ka-Shing is a prime example of a Chinese expat in the bamboo
network.
Li’s father died when he was 15 so he dropped out of school and got
a job labouring at a plastics company to support his family. He
worked there for 16 hours per day.
Eventually, he had saved enough money to start his own business,
Cheung Kong Industries, which specialised in the manufacture of
plastics.
He then expanded the organisation into a leading real estate
investment company, and eventually acquired Hutchison Whampoa,
a company with the world’s biggest port and telecommunications
operations, and Hong Kong Electric Holdings Limited.
Li Ka-Shing’s son, Victor Li, serves as managing director and deputy
chairman of Cheung Kong Holdings Limited.
Y.C. Wang is another example, with his Formosa Plastics Group.
Each of his 10 children holds an executive position in the family
business, and his brother is president of Formosa Chemicals and

10. HOW ARE BUSINESSES WITHIN
THE BAMBOO NETWORK
STRUCTURED?
Most, if not all managerial positions within a company in
the bamboo network will be filled by family members.
This means that there is a significant amount of trust at
the top of the company, as well as loyalty and flexibility.
It also means that the top business executives are more
likely to sit and have a conversation to plan company
strategy or discuss issues rather than handing each other
paperwork or arranging formal meetings.
Instead of meetings with expensive lawyers and
accountants in formal settings, there are conversations
between friends and relatives.
Kinship, dialect and common origin provide the basis for
mutual trust in business transactions in the network, even
when conducted at great distances.

11. HOW ARE BUSINESSES WITHIN
THE BAMBOO NETWORK
STRUCTURED?
A common set of values exists in the bamboo network which includes hard
work, conscientiousness, loyalty to superiors and trust among family and
friends, which allow many of the bamboo network businesses to get around
government-imposed barriers.
The fact that minimal paperwork is involved also means that there is no
paper trail, should there be any government investigations of the company.
The bureaucracy embedded within most businesses in Western culture is
much less prevalent in Chinese businesses, as the personal relationships
the management team have with each other are very strong, and there is
less of a hierarchical structure given the relationships are a lot closer.
As mentioned before, the business will generally pass from one generation
to the next, typically giving the sons preference over the daughters in terms
of company leadership.
The head of the family will be the chief decision maker, and any sensitive
information will be on a strict need-to-know basis with regards to non-familiar

12. HOW ARE BUSINESSES WITHIN
THE BAMBOO NETWORK
STRUCTURED?
Trust is one of the most important factors in the
bamboo network, and only employees who have
worked with the employer for a long time will hold
higher positions if they are not family members.
Because the leader of the company is generally the
head of the family, he has the power in the business
sense and in the social sense, which can be
effective in maintaining control, since he will have
more experience than his children and the
responsibility they have to respect him in all spheres
of life.

13. CONFUCIANISM IN BAMBOO
NETWORKS
1. “To live is to love others, to honour ones parents, to
do what is right instead of doing what is advantage, to
practice reciprocity, and to rule by moral example
instead of by force and violence.”
2. This famous Confucius quote is useful in showing how
Confucianism strongly affects business structure and
the bamboo network.
3. As mentioned before, the businesses within the
bamboo network are all family-managed.
4. These businesses also strongly believe in reciprocity,
the core idea behind ‘guanxi’ relationships.
5. Finally, ruling by moral example is extremely
important in the bamboo network, as one of the
hallmarks of the bamboo network is trust, meaning the
business must be operated in a way in which
everyone feels comfortable.

14. POSITIVES OF BAMBOO
NETWORK
1. There are many advantages to the bamboo network
model of operating a business.
2. The owners are the controlling managers, so they do
not face issues with conflicting values or ideas in
upper ranks.
3. This means that decisions can be reached a lot faster
and with less time wasting, so managers can devote
their attention to doing business and completing the
tasks set before them.
4. Also, the fact that there is less paperwork and more of
a personal nature means there are higher levels of
trust, interaction and discussion.
5. Naturally, this means better idea formulation and
consideration.

15. NEGETIVES OF BAMBOO
NETWORK
The fact that the businesses in the bamboo network
were started as very small, family run operations means
that they are typically very low-tech in nature, and rely on
hard work rather than technology to complete a task.
They also have a very limited marketing capacity,
because the bamboo network enterprises tend to only
make products for other businesses to use, rather than
products for consumer purchase. For example, many of
the companies are involved in real estate, like hotels.
They are good at making deals to sell the hotels to other
businesses, but would be less efficient in running the
hotel themselves simply due to the fact that they’d have
to market it and put on a public face, something that is
not typically required in their line of business.
Possible issues with western trading

16. NEGETIVES OF BAMBOO
NETWORK
Businesses from the West can compliment businesses in
the bamboo network, as long as the two can acknowledge
their different operating styles and values. For example,
trying to turn a Chinese company into a bureaucratic
Western-style business is bound to fail; just the same as
trying to remove the hierarchical structure in an American
business will not work. Western businesses do have
something to offer those in the bamboo network by way of
technical expertise, consumer marketing skills and the
ability to manage large-production operations.
The Chinese businesses have something to offer the
West, in that typically businesses in the bamboo network
have a low public profile, reducing the likelihood of
becoming a target of public criticism or governmental
action. Most of the companies serve as middlemen, making

17. NEGETIVES OF BAMBOO
NETWORK
The owners also tend to have connections in
government, meaning they are privy to things that
western companies are not.For example, Li Ka-
shing’s son, Richard Li, started a company called
PCCW. The company then won a controversial land
deal, acquiring valuable waterfront real estate from
the government without any public auction bids.
Many in Hong Kong cried cronyism, as Hong Kong
chief executive Tung Chee Hwa gave away the land
to his new high-tech residential and commercial
venture called Cyberport.
 The bamboo network enterprises do not produce
or market any major consumer product, however, so
they have little experience in managing large
manufacturing operations.