From Global Pariahs to Pampered Citizens

However, non-resident Indians have been much more cautious about investing in the home country notwithstanding their emotional affinity. Like his Chinese counterpart, the NRI also needs to know that he will make a profit on his investments.

By 1949 approximately 11 million Chinese, not counting those in Hong Kong and Taiwan, were dispersed in five continents. Many of them moved into entrepreneurial occupations as soon as they could pay off the contracted debts. A third exodus occurred in the 1970s when host country immigration laws were relaxed, and in the 1980s when Chinese students — 150,000 to the US alone — went to the advanced western countries and many stayed on after the Tienanmen Square incident.

By the time the reforms were announced in China in 1978 the profile of the Chinese diaspora and the economic strength of its approximately 55 million members (including Taiwan and Hong Kong) matched the needs of the Chinese economy.

In Indonesia, for example, by the 1980s overseas Chinese accounted for 3 per cent of the population but owned 70 to 75 per cent of the private capital, and Chinese conglomerates dominated medium and large scale corporate capital. In the US individual Chinese did well enough in the gold mines for one of them to be listed as a founding inhabitant of Los Angeles in 1781.

The success of China’s small-to-medium export-oriented, low wage, labour intensive, low technology industries in the 1980s was based on the experience and entrepreneurship of overseas Chinese who brought their capital and management techniques to these zones.

Most of this has, however, come on the heels of the Chinese government’s proactive policy of attracting the diaspora with the promise of making profits. Since the 1980s legislation, the provision of tax incentives, infrastructure and the devolution of decision-making powers to local and provincial governments and administrations have created a business climate that meets the needs of overseas Chinese business.

One of the great myths about diaspora communities is that they would prefer to do business with people who are ethnically similar, and in the homeland to which they are attached by feelings of patriotism. The Chinese diaspora dispels both myths, and herein lies a lesson for Indian policy makers who prefer to view the diaspora as a song and dance event rather than an economic opportunity.

In a revealing 1995 survey of diasporic communities in South East Asia 45.3 per cent of those surveyed said they would invest in China for benefit, 28.3 per cent said they invest for human relations as well as for benefit, 13.2 per cent would invest in their ancestral hometowns in institutions like schools, and only 5.7 per cent said that patriotism was a consideration. Interestingly, 87.1 per cent also said that what was good for Chinese society was also good for international society.

The caution with which the Indian diaspora looks at India as a business opportunity indicates that it might well have the same reasons for putting down its money.