Three booking agents and two assistants were on duty at 4.30 p.m. when a brick shattered the window of the China Viaje travel agency in Tijuana's business district. At 6.00 p.m. they were sitting in a row before their manager and two representatives of the Chinese Association of Tijuana. Pedro, the owner of the business, spoke to me in a surprisingly calm voice:
Now do you see? This is what I was telling you about: it's been happening more and more to Chinese businesses. This has been a bad year. Is it because our employees are Chinese? When these things happen we try to hold our heads high and carry on without retaliating, and without drawing attention to ourselves. You're the anthropologist, so you tell me, what's going on? Have we done something wrong?Footnote 1
The incident at China Viaje was not isolated. In November, a month earlier, a Chinese supermarket just three blocks away had been vandalized and robbed, and the owners of a local department store specializing in imported Chinese home appliances discovered the words “Pinche Chinos” (“Damn Chinese”) spray-painted on its front window. When the mayor announced his support for the establishment of a Chinatown in downtown Tijuana, the opinion pages of local newspapers showed strong opposition: “How ridiculous, the damn Chinese have already inundated us with commercial piracy, and now they want to put a Chinatown in Tijuana.”Footnote 2
Some 1,800 miles away in the heart of Latin America's oldest Chinatown, a heavy-hearted group of Chinese descendants convened in Havana's Cuchillo Lane. Public hostility, inadequate legal protection and official neglect were not among their concerns; on the contrary, they were worried about the growing attention and incessant commercial regulations they had attracted from the Cuban state. The goal of their meeting was to appraise, five years on, the 2006 dissolution of the district's co-ordinating body, the Grupo Promotor de Barrio Chino (Promotion Group of Chinatown) and the assumption of its administrative responsibilities by the Office of the Historian of the City. Everything from foreign donations to proposals for cultural festivals and tourism development had since been assessed and regulated by the Office, signifying a total reorganization in the conduct of local business and politics.
Attending the meeting were Yrmina Eng Menéndez, Julio Hun Gerardo and Carlos Alay Jo, three founding members of the Grupo Promotor. Each had been instrumental in Barrio Chino's “revival” in the 1990s and early 2000s, and each believed that the Office's externally devised plan for growth and development had weakened the district's cultural and economic potentials. The irony of their predicament, they said, was plain to see:
The tourists come here to see the new gift shops, the restored restaurants and streets with fashionable cafés. What they don't see is the human cost below the surface. Our social activities are not supported, our elderly residents are neglected, and our restaurants are paying higher taxes than ever … The bureaucrats behind all this become suspicious whenever we try to do something really useful for our community.Footnote 3
In both Cuba and Mexico, resident Chinese communities are confronted by the common perception that their commercial activities are strongly bound up in ethnic favouritism, and therefore pose a threat to national interests. It is a recurring narrative that has resurfaced in both countries during times of economic hardship, most powerfully in the 1930s when the Great Depression provoked the forced closure of Chinese businesses in Cuba and the expulsion of some 10,000 Chinese people from Mexico. Today the narrative is fuelled by China's growing global influence and the role that overseas Chinese communities are thought to play in it.
It is striking that similar preoccupations should emerge in Cuba and Mexico, countries that occupy opposite ends of the spectrum in terms of economic openness and political ideology. A combination of downward coercion and upward nationalism continues to maintain the Cuban state's firm grip on civic administration; by contrast, three decades of contested privatizations in Mexico, driven since 1994 by the North American Free Trade Agreement, have eroded public confidence in the state's economic credentials. China's growing impact has reinforced existing tendencies. In Cuba it has revived historical anxieties about excessive foreign influence, evident in the state's recent attempt to assimilate Barrio Chino – and its emerging trans-Pacific ties – into a centralized scheme of governance and regulation. In Mexico it has undermined the government's already fragile credibility by provoking accusations from the private sector and the media that incompetent policy makers are to blame for China's negative economic impact. While China is now Cuba's second largest trading partner (with bilateral trade reaching $1.7 billion in 2010), it is Mexico's most obdurate competitor (with 2010 trade reaching $49.8 billion, but according to Mexican figures only $4.2 billion of this in Mexico's favour).Footnote 4
Diverging Cuban and Mexican reactions to China's rise have generated policy orientations whose implications are surprisingly similar for domestic Chinese communities. The Cuban tendency towards centralized management has produced top-down regulations unable to accommodate fully the priorities and productive capacities of Chinese ethnic associations and neighbourhood leaders. Meanwhile, the hypersensitivity of Mexican politicians to public opinion has prevented them from openly collaborating with resident Chinese entrepreneurs to harness their unique business potentials. In both cases, national policy is out of step with local reality, impeding genuine engagement with Chinese communities and neglecting potentially useful sources of economic growth and political support.
The case studies presented below illustrate the political and cultural obstacles that have blocked productive outcomes, but they also suggest that these pressures are not insurmountable. The final case study from the Mexican state of Baja California demonstrates how overseas Chinese communities, when effectively integrated into local structures of governance, can provide important new opportunities for leveraging benefits from the world's fastest growing economy. The article concludes that overseas Chinese entrepreneurship can bring broad-based social and economic rewards, but also that this outcome requires approaches to regulation and rationalization that are sensitive to local concerns.
Engaging Overseas Chinese Networks
Chinese migration to Cuba and Mexico can be traced to a shortage of labour in the late 19th and early 20th centuries. Both communities shared the traumas of discrimination, but from the mid 20th century onwards they pursued different political, demographic and economic paths. In Cuba, the revolution of 1959 led to the nationalization of Chinese businesses, the emigration of Chinese entrepreneurs to the United States and mandatory recognition of the PRC among Chinese ethnic associations. Twelve associations and their co-ordinating body, the Casino Chung Wah, survived these pressures, and in the early 2000s were reinvigorated by the induction of over 2,500 enthusiastic second, third and fourth-generation descendants.
Biologically and socially integrated with Cubans of European and African origin, the island's Chinese descendants have gradually climbed the ranks of the associations and initiated a range of dynamic initiatives. These include hosting international conferences on the Chinese presence in Cuba, converting the associations' canteens into thriving restaurants with investment from the state and foreign sources and, increasingly, conducting commercial exchange with partners in mainland China. Deepening contact with mainland China has prompted many to study Mandarin Chinese, to set up language tuition programmes in Chinatown and, in 2009, to oversee the establishment of a Confucius Institute with support from the PRC. Despite the Cantonese origins of the Chinese Cuban community, only the ageing few born in China speak their native tongue.
In contrast to Cuba, the number of first-generation Chinese people resident in Mexico has grown rapidly since the mid 20th century, but owing to the undocumented status of many, Mexican scholars have little faith in official statistics. While the census of 2010 reports 6,655 Chinese-born residing in Mexico, the Chinese Embassy in Mexico estimates 3,000, plus 20,000 Mexicans of Chinese origin, dedicated mainly to gastronomy, trade and to a lesser extent bureaucracy and professional services. The Overseas Chinese Affairs Office in Beijing calculates roughly half the number of naturalized Chinese, living primarily in the northern border cities of Tijuana and Mexicali, the urban metropolis of Mexico City and the southern state of Chiapas. Unofficial accounts from Tijuana and Mexicali indicate that these two cities alone are respectively home to 25,000 and 35,000 Chinese immigrants and descendants, many of whom arrived since 2000 and are not legally registered. Whether in Mexico City or on the US border, Chinese people speak of a division between old and new arrivals, the former descending from the Cantonese-speaking immigrants of the 19th and 20th centuries with corresponding ties to the KMT, and the latter hailing from the Mandarin-speaking urban centres of the eastern PRC.
China's growing influence in Mexico has subdued some of the differences between old and new arrivals, and aggravated others. Since 2000 the Chinese government has offered commercial partnerships and orchestrated prestigious visits from senior officials to persuade Mexico's Chinese associations to renounce recognition of the KMT and adopt Mandarin as their official operating language. However, the recent wave of Chinese immigrants, comprised largely of Mandarin-speaking young people with little interest in traditional ethnic associations, remains disengaged from older Cantonese-speaking communities, and from Mexican society in general. These individuals have generally focused on commercial activities, registered and otherwise, such as importing and retailing low-cost Chinese consumer goods, and have consequently drawn the scorn of their predecessors.
Despite their differences, Chinese communities in Cuba and Mexico endured similar historical pressures. Repressive work regimes, discriminatory commercial regulations and xenophobia in the late 19th and early 20th centuries made membership in Chinese ethnic associations a matter of survival. Marginalization stimulated – as it has elsewhere – informal networks of protection, solidarity and “bonding social capital.”Footnote 5 Although conditions have since improved, 21st-century anxieties about China's growing global influence, compounded by competition between Chinese exporters and domestic manufacturers, have brought new pressures to bear on overseas Chinese communities. Ethnic associations therefore continue to fill important functions for their members, including economic advancement, protection against discrimination and mechanisms for bypassing regulations that are perceived to be inappropriate or unfair.
Where external pressure has fomented in-group solidarities and loyalties over time, as is the case for Chinese communities worldwide, fairness is conceived not only in terms of individual advancement but also as the protection of collective cultural and economic security.Footnote 6 Family ties and ethnic allegiances infused with guanxi 关系have furnished network members with benefits such as start-up capital, market access, a flexible labour force, a loyal customer base and informal advice about opportunities. This has fostered the confidence necessary for foreign trade, informal loans, community mutual aid and business partnerships.Footnote 7
Chinese co-operative networks have sustained collective notions of exchange, loyalty, identity and fairness, but their informality and ethnic partiality has sometimes led them into conflict with host country laws and public values. Internal affinities among ethnic Chinese people in Indonesia and Malaysia, for instance, provoked riots against them in late 1960s, and continue to complicate the multicultural agenda in both.Footnote 8 Recent case studies presented in The China Quarterly show that perceptions of ethnic favouritism have also generated hostility towards Chinese immigrants across Africa.Footnote 9 The predicament of Chinese communities in Latin America is more subdued, but regional administrators have nevertheless struggled to incorporate them into domestic structures of governance and compliance.
From a policy perspective, tight-knit groups governed by internal regulations pose a challenge to civic administration and the rule of law.Footnote 10 As Alejandro Portes puts it, “the capacity of authorities to enforce rules (social control) can thus be jeopardized by the existence of tight networks whose function is precisely to facilitate violation of those rules for private benefit.”Footnote 11 Informal networks impede the efforts of governments and markets to harness domestic talent and “scale up” local capacities for an ostensibly greater national good. This process is ideally characterized by the transformation of local norms and values into a wider system of procedural rules, and the “rationalization of social capital” through “the gradual replacement of informal associations and networks by formal administrative structures, and the impersonal market mechanism no longer tied to individual identities.”Footnote 12 Emancipated from ethnic loyalties and bonding social capital, support networks and the trust they engender should – in the eyes of policy makers – become a public resource.
In the eyes of community actors, rationalization can bring opportunities for legal protection and commercial expansion, but these benefits must be weighed against the cost of subordinating immediate local needs to remote national priorities. The casualties of institutionalization, suffered by social movements and mutual aid networks across Latin America, include the erosion of internal commitments, the loss of cultural identity and the co-option of interests by anonymous bureaucrats.Footnote 13 Co-operation across the “public–private divide” is not, however, a zero-sum game. Undocumented Mexican farm workers, Afro-Cuban religious congregations, Brazilian women's networks and Chinese communities in northern Mexico (discussed below) have entered into formal synergies with states and markets when it has benefited them to do so.Footnote 14 As a series of policy papers from Harvard University's John F. Kennedy School of Government has argued, regulatory frameworks can earn public respect and become “embedded” within socio-economic systems when they are sensitive to local interests. By contrast, “primitive metrics” of regulation that are not “tailored to take account of the culture, education, and priorities of intended audiences” afford little basis for state–society co-operation.Footnote 15
Opportunities to build formal symbiotic partnerships with the Chinese diaspora in Latin America abound, but their potential is yet to be realized. Governments can endorse trade fairs organized by Chinese associations, facilitate work visas for potential Chinese investors, provide diplomatic support for resident Chinese entrepreneurs travelling “home” to seek out new markets and sources of investment, and promote public education about Chinese history, migration and culture. When support has been forthcoming, Chinese communities have collaborated enthusiastically, but in its absence they have looked to alternative informal sources of affirmation, both within themselves and across the Pacific.
How should state and private actors harness the potential of their countries' emerging linkages to China? The political differences between Cuba and Mexico span the spectrum of state and market-oriented models, suggesting different responses to this question. However, regardless of their blend of public and private carrots and sticks, policy makers can harness a common resource: if handled appropriately and consensually, the ethnic solidarity of domestic Chinese networks can work for the broader national benefit. Case studies from Cuba and Mexico illustrate that governments and publics ignore the productive capacities of resident Chinese communities at their own peril; by contrast, they stand to reap substantial rewards if the activities of these communities are rationalized in more sophisticated ways – sovereign and intact – into broader strategies of economic development.
Formalizing the Informal in Havana's Barrio Chino
On 2 January 1847, 300 Chinese indentured workers, or “coolies” (苦力 kuli, literally “bitter use of strength”) boarded the Spanish frigate Oquendo in the port of Amoy (present-day Xiamen), bound for Cuba. Contracted through the Manila and Tait Company in London, they were conscripted as labourers for eight years to the Spanish Real Junta de Fomento y Colonización. The 206 who survived the trans-Pacific voyage arrived in Havana's port of Regla on 3 June the same year, and were joined ten days later by 365 more aboard the British vessel The Duke of Argyle. By 1853 more than 5,000 Chinese had arrived in Cuba, and by 1873 an additional 132,453.Footnote 16 Chinese workers arrived with the hope of fulfilling their contracts and returning home wealthy, but on four pesos per month, few returned home at all. Transcripts of an 1874 court case recently analysed by Lisa Yun demonstrate that whether or not the coolie trade constituted slavery, the social conditions in which Chinese workers and enslaved Africans lived were practically the same.Footnote 17
When Chang Li and Laig Siu-Yi established a family restaurant and a fruit market in 1858, they set in motion a system of supply and demand that would underpin the development of Cuba's first and only Chinatown. By the early to mid 20th century, restaurants and convenience stores trading in fruits and vegetables, laundry services and artisanry underpinned Barrio Chino's expansion to 44 city blocks, making it the largest and most important Chinatown in Latin America, rivalling those of San Francisco and New York. Forbidden by law to live within the city centre (today Old Havana), the Chinese community developed Barrio Chino as “an independent sector that sought to be the Cuban extension of the province of Canton.”Footnote 18
Despite their success in small agriculture and other niche sectors, wealth eluded most Chinese Cubans. Beyond the economically elite Chinese who arrived from post-gold rush California, it was only those involved in organized gaming and opium trafficking who prospered. Nevertheless, their perceived affluence provoked protests in the early 1930s, leading the government of Ramón Grau San Martín (1933–34, 1944–48) to implement laws (as Mexico had done in 1930 and as Panama would do in 1935) requiring them to diversify their workforces to include at least 50 per cent (later 80 per cent) non-Chinese Cubans. Jealously and resentment towards the Chinese community is evident in the music of the time, featuring imitated accents and lyrics about Chinese immigrants and their descendants working multiple jobs, attracting Cuban women with their wealth, and buying up property both locally and in the United States.Footnote 19 Duvon C. Corbitt, who worked as a lecturer in Havana in the early 1940s, observed that behind the official image of harmonious ethnic integration, discrimination was widespread: “The good terms on which almost all Chinese live with their Cuban neighbours, and the relatively numerous marriages between the races, would seem to belie the fact that prejudice exists; nevertheless, close contact with the situation will reveal that the Cubans generally look on the Chinese as social, and even intellectual inferiors.”Footnote 20
Chinese businesses initiatives were protected and supported by ethnic associations organized according to members' family names, region of origin and political affiliation. The associations' co-ordinating body, the Casino Chung Wah, was founded in 1883 and legally registered in 1893 under the Honorary Presidency of the Chinese Consul General of Cuba, Tam Kin Cho. Together, the Casino and the associations linked local suppliers to consumers through networks of mutual aid and ethnic solidarity. They also fostered the development of Chinese restaurants as sources of employment and acculturation for new arrivals, and as social epicentres where community affairs were discussed and deals negotiated. The associations epitomized the development of the “social economy,” relying on informal lines of trade with agricultural producers on the outskirts of Havana to supply their restaurants and canteens.
When Fidel Castro marched into Havana in 1959, Barrio Chino continued to function as a hub of unregistered commerce, economically and socially disarticulated from its surroundings. In an attempt to rein in the local informal economy, a special unit of the National Revolutionary Militia called the José Wong Brigade (named after the legendary young Chinese Cuban communist and founder of the illegal newsletter Grito Obrero Campesino, assassinated in 1930) entered the district on 17 February 1960. Comprised entirely of Chinese Cubans and operating in Cantonese, the Brigade launched an outright campaign against gambling, prostitution, opium trafficking and black market trading. The Sino-Soviet split of the 1960s strained diplomatic relations between Cuba and China, intensifying official scrutiny of Barrio Chino, particularly during the “great revolutionary offensive” of 1968. The district's businesses were nationalized, and only those properties linked to the Chinese associations remained in community hands, prompting the emigration of a significant (but unknown) proportion of Chinese Cubans. The associations continued to function quietly, relying on resilient informal networks to supply their canteens and social clubs.
By 1986 the rapidly declining number of first-generation Chinese immigrants prompted the Casino Chung Wah to advise its 12 remaining associations to open membership to second- and third-generation Chinese Cubans. In the early 1990s most did so, and by 2006 the associations together boasted a membership of 2,550 individuals. According to Jorge Chao Chiu, Secretary General of the Casino Chung Wah, in early 2011 the Casino registered 171 surviving first-generation Chinese people in Cuba.Footnote 21 Unlike most of these individuals, second- and third-generation Chinese Cubans do not hold Chinese citizenship, and are more biologically and culturally integrated into Cuban society. Despite this diversity, Chinese descendants have demonstrated a strong interest in the ethnic associations and now occupy senior (though not the highest) posts in the most important of these, including Min Chih Tang, Lung Kong Kun Sun and the Casino Chung Wah.Footnote 22
Governing or governed, native Chinese or not, all are aware that Barrio Chino harbours a legacy of informal support networks that are powerful even by Cuban standards. This legacy manifested itself in 1994 when a group of community activists marshalled support from the Casino Chung Wah and the ethnic associations to establish a grassroots organization called the Grupo Promotor (Promotion Group) of Barrio Chino. Using the Grupo as an administrative platform, they persuaded the municipal government of Central Havana to permit Chinese Cuban entrepreneurs to set up retail outlets for shoes, clothes, kitchen equipment and other items imported directly from China. Led by Chinese descendant Yrmina Eng Menéndez, the Grupo was so successful that it attracted official pressure to register as a state institution, and in 1998 it conceded. Formalization brought executive power as the Grupo became officially responsible for Barrio Chino's economic development, but it also brought a raft of unforeseen regulatory provisos. For four years Eng and her team brokered deals between the Cuban state, the Chinese community and business partners across the Pacific, but the complications of regulating expanding trade eventually saw the Grupo's founding members supplanted by external career administrators.
The transformation of any informal association into an official institution inevitably involves compromise. As grassroots loyalties and allegiances are rationalized, local autonomy should, in theory, be compensated by expanded economic and legal capacities for community protection and advocacy. In Barrio Chino this process was thrown off course by a convergence of structural and personal weaknesses. Official registration placed the Grupo under the jurisdiction of the Central Havana municipal government, an entity already overburdened with responsibility and lacking sufficient resources to develop regulations tailored to Barrio Chino's unique socio-economic needs. Restaurants connected to the associations, for instance, were subjected to civil codes designed for Cuban non-governmental organizations (NGOs), and as such were required to submit their profits (between $2,000 and $5,000 per day) to designated bank accounts accessible only with written permission from the Ministry of Justice. Monolithic acquittal procedures, combined with the Grupo's green light for commercial activity, generated easy opportunities for illicit personal gain. Irregularities became so pronounced that the Grupo, after eight years of official service, was disbanded and replaced by an entirely different system of economic and civic governance.
On 1 January 2006, administrative responsibility for Barrio Chino was transferred to the Office of the Historian of the City. As its name suggests, the Office has distinguished itself by explicitly attempting to superimpose a temporal dimension on to its urban development projects in order to emphasize continuity with the cultural past. Since the early 1990s, the Office has overseen the economic development of the adjacent municipality of Old Havana, whose historical charm it has leveraged as the centrepiece of tourism development.Footnote 23 The Office's expansion into Barrio Chino represents a bold effort to grow its signature brand of historical tourism. Willing and able to finance the “revitalization of historical patrimony,” it has set out to establish itself as the rightful steward of the district's economic affairs.
Directing its efforts at the associations and restaurants, the Office attempted to do what one Cuban urban development agency believes is the most pressing task facing the island: “formalize the informal” in order to “bridge the widening gap between state structures and community life.”Footnote 24 Employing a proven formula, it set about converting Barrio Chino into a mainstream tourist destination by providing opportunities for residents to participate actively in their neighbourhood's “revival.”Footnote 25 These opportunities were initially embraced, but local entrepreneurs soon became frustrated with the Office's prefabricated book-keeping requirements. Commerce with Chinese exporters quickly diminished as a generalized system of trade credits replaced cash payments. The associations' restaurants were required to continue submitting profits to designated bank accounts, and subjected to centralized sourcing restrictions that sought to formalize their supply chains through officially nominated providers.Footnote 26 The Office's attempt to rationalize local activities also involved a new tax: in addition to an existing levy charged by the Organización Nacional de Asuntos Tributarios (National Organization of Tributary Affairs), private (cuenta propia) restaurants like those in Cuchillo Lane would now have to pay a “donation” to fund neighbourhood development projects.
Association elders believed that the new environment would force them to curtail or abandon their 150-year-old tradition of charitable service, including complimentary meals for the most needy local residents. Stricter regulations were also introduced to community organizations that openly maintain foreign linkages, such as the Residencia China, which provides housing, medical attention and other services to many of Barrio Chino's remaining 159 first-generation Chinese residents. According to the Residencia's director:
We've always received donations from foreigners. Usually these have been private individuals, and many of them have been from China. There has always been a high level of understanding and trust. But now, if I need to get a new sofa for the Residencia I have to first go through a long approval process, and every penny needs to be accounted for.Footnote 27
The Office's attempt to incorporate collaborative ties and social capital – what the Residencia's director called “understanding and trust” – into a general scheme of rationalized governance was criticized openly by the Casino Chung Wah. Two days before the Office's takeover, and shortly before his death, its President Li San commenced a public speech in Cuchillo Lane by invoking a sense of imperilled local authority: “Our unity is under threat, and we must be stronger now more than ever before.”Footnote 28 Whether or not this comment was intended to incite non-compliance, deepening informality over the following five years turned the Office's objectives on their head. A community leader described the situation in early 2011:
We are governed by a series of bureaucrats whose eyes have become rounder over the years. Most of them live in El Vedado [a comparatively white and wealthier district of Havana], and they know little about our culture. From 5.01 p.m. until 8.59 a.m. they are not concerned with Barrio Chino … The new system has problems, for example, the leaders of the associations take a cut of about 25 per cent before submitting their profits to the Ministry of Justice bank account. That way they can live more comfortably and invest more freely in their restaurants.Footnote 29
Taking personal charge of profits was not the only strategy employed by restaurant administrators, who also privately flouted the Office's requirement that they purchase supplies from state designated stores. The informal sector, as it had for decades, continued to play a key role in local supply and demand. Furthermore, family connections compensated for the collapse of formal commercial ties between Barrio Chino entrepreneurs and Chinese suppliers. A district administrator estimated that between 2006 and 2011 approximately 20 Chinese investors financed the conversion of relatives' homes into restaurants and small businesses. Not only do such operations skirt the Office's foreign investment laws and property rental fees, but they also enable a 96 per cent saving on electricity, water and gas, since utilities are charged to citizens in Moneda Nacional (Cuban pesos) rather than Convertibles (convertible pesos).
The attempt of the Office of the Historian to rationalize norms and practices in Barrio Chino indicates its awareness of the need to engage informal networks, but as yet it has been unable to harness their potential. The approach developed in Old Havana by the Office's director, Dr Eusebio Leal Spengler, is commendable: “We're trying to preserve schools and houses, create jobs and encourage true participation, for which we've created dynamic fiscal structures that allow reinvestment of profits in the historic centre.”Footnote 30 Not so commendable, and less effective, is the attempt to transfer commercial regulations across distinct contexts with little adjustment for local conditions, cultures, and priorities. As a senior Office administrator put it:
Chinese immigrants and their descendants have always been integrated into Cuba. Remember, one of our most famous national icons is the mulata cubana [the racially mixed Cuban woman]. Because of Cuba's long history of racial integration we have been able to work in Barrio Chino with no problems. It's just like working here in Old Havana.Footnote 31
In Barrio Chino this optimism is counterproductive, as it underestimates the efficacy of bonding social capital and guanxi accrued over generations and perpetuated by ongoing perceptions of external interference. Scholars have argued that social capital is generally not fungible across distinct contextsFootnote 32; it stands to reason that the same holds true for attempts to rationalize it.
Although community leaders complained about the Office's accountability requirements, some nevertheless perceived benefits in the formalization of local governance. Former director of the House of Chinese Arts and Traditions, Carmen Eng, noted that: “with a solid organizational structure, getting things done will be easier. No more doing deals by word of mouth. Instead we'll do things in a more disciplined manner.”Footnote 33 Despite reservations about the bureaucracy of handling foreign donations and acquiring furniture, the Residencia's director also expressed confidence in the new executive framework: “An advantage is that the Office of the Historian has contacts with foreign NGOs and sources of funds, including in China. Now there's an official mechanism for linking up with donors.”Footnote 34
The above comments support the finding that public, private and civil sectors can accrue mutual benefits from the rationalization of grassroots values, affinities and social capital.Footnote 35 Despite Max Weber's anxieties about the bureaucratic “iron cage” inherent in this process, and arguably its manifestation in Cuba, since 1959 state command of economic and human resources has produced impressive outcomes in life expectancy (79 years), infant mortality (5/1,000), expected years of schooling (17.7), environmental performance (ninth out of 163 countries) and other development measures.Footnote 36 Cuban citizens, official and otherwise, are proud of these achievements and are concerned about their sustainability as the market assumes a more prominent place in their lives. As urban development specialist Mario Coyula put it, “There is a fear that we could lose the results of 50 years of experiments, failures, lessons and achievements in a day.”Footnote 37 Their concern is reflected in the Central Report of Cuba's April 2011 Communist Party Congress, which attempts to balance economic liberalization with restrictions on the accumulation of private property.Footnote 38
Commercial regulations that accommodate the entrepreneurial initiative of local networks do not imply a wholesale adoption of free market policies and renunciation of state stewardship over national development goals. On the contrary, the evidence from Barrio Chino suggests that a balanced combination of state and market forces would produce an optimal platform for rationalizing the district's capacities. The President of the Casino Chung Wah, Juan Eng, notes that his associates in China are eager for opportunities to invest in Cuba, and that they are comfortable operating in a state-oriented environment.Footnote 39 Nevertheless, as a member of Hu Jintao's 2008 delegation to Cuba revealed, they are also concerned that unsophisticated and outdated commercial codes will impede their ability to conduct profitable business.Footnote 40 Greater administrative space for the conduct of business would alleviate these concerns and improve local conditions. This outcome, writes Cuban economist Ricardo Torres Pérez, is a key objective of Cuba's recent reforms: “If greater capacities for local management are achieved, this will enable economic synergies … that today are overshadowed by the weight of national priorities. This will produce development alternatives that account for regional conditions, improving the microeconomic use of resources and the wellbeing of residents.”Footnote 41
Barrio Chino's community leaders command knowledge, connections and guanxi that could enable them to attract investment and capital goods from China, and potentially open new channels for exports to China. To do so they will require state support in the form of diplomatic engagement, trade intelligence and regulatory oversight that permits private business networks to function under legal sanction. Locally tailored strategies are prerequisite if Chinese communities are willingly to permit their entrepreneurial capacities to be rationalized into official codes of governance. This is the case not only for state-led societies such as Cuba, but also for market-oriented economies such as Mexico. There is a need in both countries to recognize the historical and contemporary pressures driving the formation of bonding social capital in Chinese networks, and to transform this potential threat into a competitive advantage. This process is yet to run its course in Havana and Mexico City, but there are signs of progress in the northern Mexican cities of Mexicali and Tijuana.
From Threat to Opportunity in Mexico
China's unparalleled economic growth, of the order of 10 per cent per year since 1970, is sustained by a massive flow of worldwide exports, and overseas Chinese communities have played an important role in familiarizing mainland suppliers with domestic markets. In 1978 the State Council of China created the Overseas Chinese Affairs Office (OCAO) to consolidate a sense of belonging, loyalty and Chinese cultural identity among emigrants. OCAO assists overseas Chinese communities to create opportunities for trade with China, overcome linguistic and cultural misunderstandings, and build “harmony with the governments and communities that host them.”Footnote 42 In the case of Mexico, bilateral trade has accelerated rapidly, but the prospect of bilateral harmony is remote. As China's former consul general in Tijuana, Gao Shoujian, pointed out, the convergence of economic competition with persisting diplomatic and social tensions constitutes a formidable challenge to any efforts to build co-operation and understanding.Footnote 43
As in Cuba, Chinese communities in Mexico have faced pressure to integrate into their surrounding economic and legal environments. Accusations in the national media of obscure and unregulated business practices among Chinese importers have emanated mainly from small and medium-sized Mexican enterprises unable to compete with the flood of inexpensive Chinese consumer goods. These sectors perceive a chronic lack of fairness and transparency in the ethnic exclusivity of Chinese trade fairs, the labour conditions and low wages in Chinese factories, the piracy of traditional Mexican handicrafts, and the seemingly ungovernable expansion of illegally imported Chinese textiles, shoes, toys, office equipment and steel products.
According to Mexico's 2010 census, the country is home to 6,655 Chinese-born individuals (the 12th largest foreign group), a small populace compared to the 738,103 expatriates from the United States (the largest group).Footnote 44 Unofficial reports estimate the number of North American citizens residing in Mexico to exceed one million, many of them unregistered. These figures are not surprising considering that in 2010 US–Mexico trade amounted to $395 billion (almost eight times that of China's).Footnote 45 Commercial ties, though, are only part of the explanation; the other part concerns the ageing US population: in 2005 some 250,000 North American senior citizens were living in gated villages on Mexico's Pacific coast, where Spanish is barely spoken and “you can't really tell you're in Mexico.”Footnote 46 Such communities are growing, and the Mexican government reportedly hopes to attract some 5 million US retirees by 2025.Footnote 47 This objective reveals a sharp divergence of public attitudes towards North American and Chinese migrants, though the reasons for this probably extend beyond historical familiarity, trade integration and other economic considerations. As a student under the author's supervision at the Autonomous University of Baja California explained, “Even though we hate the gringos [North Americans], we wish we could be like them. It bothers us that they look down on us, so we pass this feeling on, especially to Chinese people.”Footnote 48
The uncomfortable predicament of Chinese communities in Mexico owes much to national economic insecurities generated by 30 years of ineffective industrial policy, the debilitating socio-economic impact of the war on drugs and the global financial crisis. This politically charged backdrop has intensified the bitterness of the nation's unsuccessful economic competition with China, which one trade unionist described as “the global force that is taking away what little we have left.”Footnote 49 Unlike the Chinese government, President Felipe Calderón's conservative PAN party has followed the tendency of its predecessors since Miguel de la Madrid (1982–88) to shy away from proactive industrial policy as a legitimate solution to macro-economic problems. The much-touted Sino-Mexican “strategic partnership” has consequently played out on uneven economic terrain, generating correspondingly slanted perceptions of China and its people.
A pervasive social symptom of the economic imbalance, writes Francisco Haro Navejas, is a homogenizing tendency in the Mexican public sphere to equate Chinese businesses, products and people with the global ambitions of the Chinese state.Footnote 50 This tendency is strengthened by the mass media's frequent publication of domestic and foreign articles critical of human rights abuses in Chinese state-operated factories, the substandard quality of the products they manufacture and the unfair competition they represent for Mexican businesses.Footnote 51 As illustrated at the beginning of this article, suspicions extend to Chinese communities resident in Mexico, which are viewed by many as the foot soldiers of China's commercial “invasion.”
It does not require detailed investigation to reveal that multiple ethnic origins, historical backgrounds, political affiliations and economic aspirations have produced considerable diversity in Mexico's Chinese diaspora. Communities descended from 19th- and 20th-century Chinese migrant labourers, for instance, did not automatically embrace the 1949 triumph of New China and have generally maintained only thin relations with its diplomatic missions. For thousands of Chinese Mexican entrepreneurs, diplomatic indifference has stemmed less from political considerations than a reluctance to expose their blend of local, trans-Pacific, formal and informal business activities to the scrutiny and regulatory designs of Chinese and Mexican authorities. For their part, the governments of both countries have shown little interest in Mexico's Chinese community, or even in each other, instead focusing what little co-operation they maintain on the upper echelons of transnational business. Their failure to find bilateral solutions to Mexico's chronic trade deficit with China has not as yet provoked serious efforts from the Mexican government (with the exception of Baja California) to harness the entrepreneurial capacities of resident Chinese communities.
Identifying missed opportunities for engagement, ethnic Chinese entrepreneurs in Mexico City have – like in Havana – attempted to develop commercial initiatives with partners in China. Conscious of these thickening trans-Pacific ties, the Chinese embassy has pressured resident Chinese communities to register their activities officially, advance opportunities for Chinese firms through local political and business connections, and explicitly articulate support for the PRC's “one-China” policy. In response, the Confederation of Chinese Associations of Mexico (CACHIMEX) has sought public support from the Mexican and Chinese governments for its commercial expos and trade fairs. However, official endorsement from either government is unlikely considering the political sensitivity of Mexico's trade deficit with China, and popular perceptions that such activities are dedicated to importing Chinese products – legally and otherwise – into Mexico.
Despite the lack of official support, in 2009 CACHIMEX co-ordinated the first “Expo China–Mexico,” which brought together some 250 companies, half from Mexico and the other half from China, Vietnam and other Asian countries. The second Expo, held in November 2010, made headway in facilitating fruit, vegetable and scrap metal exports to China. According to CACHIMEX Secretary General Jimmy Li, “we hope this will reduce the perception that these fairs are all about bringing ‘made in China’ products into Mexico.”Footnote 52 Li adopts an “integral” approach to Sino-Mexican commerce by complementing these trade fairs with educational seminars delivered by local scholars, such as the director of UNAM's Centre for China–Mexico Research, Enrique Dussel Peters. According to Dussel Peters:
CACHIMEX brought in 15,000 people to its last Expo, but this could, and should, be 50,000. Since the Chinese and Mexican governments won't get involved, the Expo is run 100 per cent by the business community. This won't work because it results in a focus on importing over exporting, and leaves no space for policy strategies that could turn this around.Footnote 53
The lack of policy engagement with resident Chinese entrepreneurs, paired with substantial trade tariffs on imports from China, has created an environment conducive to unofficial alternatives. A Chinese student at UNAM spoke of his family business:
My sister has lived here in Mexico City for seven years, and I have come to help her. We import watches, clothes and shoes from our contacts in China, and we can order any brand you want. I get the watches via UPS, and my sister handles the clothes and shoes. She sends a van to Guatemala to pick them up because tariffs there are lower, and it's easier to bribe customs officials. The tariff is low on watches because Mexico doesn't produce them, but clothes and shoes are between 50 per cent and 200 per cent. When the clothes come straight to Mexico we ask the suppliers to write a lower price on the papers to reduce the tax.Footnote 54
Destined for urban marketplaces and street kiosks, imported Chinese consumer goods have become a major source of dispute. The country's most notorious outlet for unregistered merchandise is Tepito, on the eastern perimeter of Mexico City's Historic Centre. Customers are drawn to the district by its commercial catchphrase: “dress yourself with 100 pesos [US$8].” Unable to compete with low-priced contraband, owners of the Historic Centre's 17,670 registered enterprises are increasingly converting their shop-fronts into warehouses to service the 40,000 unregistered merchants who have now spilled over from Tepito.Footnote 55 In Tepito alone it is thought that some 150,000 people are dedicated to street vending, and according to one local representative of 500 vendors, “our basic needs are more important than official legal regulations; street vending is a safety valve.”Footnote 56 Former Economic Counsel to the Mexican Government in China, Juan José Ling, agrees:
Mexicans should realize that their informal sector, which constitutes something like 40 per cent of business in the country, is something they need. The official figure of 5 per cent unemployment is a blatant lie. There is an abundance of people we call “nini”: ni trabajan ni estudian [neither work nor study]. They need informality to survive. The real problem is the lack of government support for education and training, and for Mexican companies, which should be actively finding new markets – including in China – and creating jobs.Footnote 57
The absence of a coherent strategy for dealing with China and a reliance on trade tariffs to quell domestic political fallout have restricted formal economic opportunities for Chinese entrepreneurs in Mexico City. Family connections, guanxi and the informal sector have logically filled the void, though in ways that generate business only within relatively small circles of ethnic entrepreneurship. Resulting perceptions of disproportionate advantages enjoyed by Chinese communities and their networks further impede formal strategies of engagement. The problem is circular: public hostility towards Chinese communities obstructs state support of their commercial initiatives, provoking informal alternatives confined to tight-knit ethnic networks, in turn generating further suspicion and hostility. In this environment, the prospect of rationalizing Chinese initiatives into formal structures of governance is remote.
The same circle that revolves in Mexico City extends to the northern cities of Mexicali and Tijuana, but geographic and legislative distance from the metropolis has enabled regional policy makers to reach out more effectively to resident Chinese communities. Despite the public pressure these communities face, official partnerships have enabled their leaders to explore tentative solutions. Recent steps taken by the state of Baja California government and Chinese business networks to co-operate with each other demonstrate that rationalization, when premised on the fulfilment of local aspirations, can produce both local and national benefits.
From 1990 until 2006 Eduardo Auyón Gerardo served as President of the Chinese Association of Mexicali, a position he used to build ties with the growing number of outward-looking commercial exporters in China. In 2001 his efforts to connect Chinese exporters with Mexican retail networks were recognized by OCAO, which appointed him as one of 32 worldwide “assessors.” Providing a stable nexus for bilateral trade, together with the related advertising, matchmaking and visas, have made Auyón a key node of contact for entrepreneurs from both sides. Building commercial networks under the auspices of OCAO, he says, has provided a robust and enduring framework for business development:
The important thing is security. Some Chinese businesses have shipped their products over only to find that the market has turned against them because of exaggerated media reports about product safety and competition with Mexican producers. As an Assessor for the Overseas Chinese Affairs Office I am responsible for selecting trustworthy clients who will follow through with their commitments. This has worked very well for us with electronic products and home appliances. Mexicali is on the same latitude as the Sahara Desert, so we are sourcing a new line of powerful air conditioners under our “Kooling Air” and “Dragón Refrigeraciones” brands, and selling these through the network.Footnote 58
Throughout his career, Auyón has cultivated a series of official and unofficial relationships to facilitate cultural and commercial initiatives between Mexico and China. In 2004 he began arranging meetings for the governor of Baja California, Eugenio Elorduy Walther, with Chinese counterparts such as the governor of Jiangsu province, Liang Baohua. When President Hu Jintao visited Mexico in 2005 to discuss strategies for diminishing the trade imbalance, he personally recognized Auyón's protagonism in facilitating new business linkages. The government of Baja California praised the potential benefits of these connections during National Immigration Week in October 2008. While seven Mexican states participated in the festivities, the Baja California branch of the National Institute of Migration (INAMI) dedicated the week specifically to Chinese immigration, holding all related events and ceremonies in the Chinese Association of Mexicali. The city's mayor, Rodolfo Valdéz Gutiérrez, described the Chinese community as “a motor of the local economy,” while Baja California's INAMI delegate, Javier Reynoso Nuño, promised to simplify the process of visa acquisition for relatives of the local Chinese community.Footnote 59
In partnership with the Chinese Association of Mexicali, in June 2010 Auyón oversaw the establishment of the Chamber of Chinese Enterprises of the North-east, a co-ordinating body for some 4,000 Chinese businesspeople resident in the states of Baja California, Sonora, Coahuila and Chihuahua. The Chamber benefits from the logistical support of OCAO's Guangdong office, illustrating the Chinese government's interest in building ties with overseas Chinese associations and in “becom[ing] the central force of the Chinese community.”Footnote 60 Through the Chamber, Auyón aims to “generate a bridge to support commerce between Chinese entrepreneurs and producers in Asia and those in this region of Mexico,” particularly in the maquiladora (manufacturing/assembly) and auto sectors.Footnote 61
Auyón's talent for matchmaking has established mutually beneficial linkages between Mexico and China. The Chamber has begun to research the placement of Mexican products in the Chinese market and work with Chinese investors seeking opportunities in Mexican copper mining and the development of renewable energy technologies in Mexicali's Silicon Border initiative. Such activities are sorely needed both for Mexico and its Chinese communities, which have faced hostility precisely because of public perceptions that they have monopolized economic opportunities rather than extend them beyond their tight-knit business networks. Support from the Baja California state government, its Chinese counterparts and OCAO may prove decisive in this regard, as institutionalized co-operation will enable the diversification and formalization of previously narrow trade ties, thereby reducing external perceptions of unfairness and illegality.
Some 135 miles west of Mexicali, the Chinese Association of Tijuana has also positioned itself as an intermediary of bilateral trade. Its Secretary General, Willy Liu Ke Wei, was recently involved in lobbying the Mexican airline Aeroméxico to open a direct flight between Shanghai and Tijuana. His efforts paid off, and in May 2008 the new route was launched with the ambition of attracting 30,000 Chinese tourists per year, inspiring Liu to set up a travel agency catering to Chinese entrepreneurs exploring opportunities in Mexico. While Chinese businesses in Baja California are reported to have seen a 30 per cent decline in earnings as a result of the global financial crisis, the agency aims to generate new trade and investment directly from China.Footnote 62
For Liu, a critical first step is to build Mexican appreciation for Chinese traditions; in his words, “commerce and culture are like sisters, and if you go down the path of culture, you arrive at the path of business.”Footnote 63 The path forged by Liu's agency is paved with both, bringing Chinese entrepreneurs to Tijuana three times a year to meet Mexican business partners in conventions and banquets that coincide with Chinese New Year, New China Independence Day and the Chinese Day of Light. Since 2005 these events have been accompanied by public parades and Chinese themed street markets, co-ordinated by his association at the invitation of the Tijuana city government. The Chinese Consulate has contributed resources to these events, for as Liu says, “the PRC needs our help in creating a good public image.”Footnote 64
As well as seeking to build a more positive image, the Chinese government has also requested that Mexico's Chinese associations break off linkages with Taiwan. To this end, in 2001 OCAO established the “Chinese Peaceful Pro-unification Alliance of Baja California,” which the state's three Chinese associations (Tijuana, Mexicali and Ensenada) immediately joined, adopting Mandarin Chinese as their operating language as a condition of entry. For the Association of Tijuana, 2001 marked the first time since its 1918 establishment that it did not conduct its annual meeting in Cantonese, the first language of 98 per cent of its members. This adjustment, along with vigilance against anti-PRC and pro-Taiwan activities, appears to be the price of institutional recognition. Indeed, without the backing of the Chinese government it is unlikely that the Chinese Association of Tijuana will attract sufficient support from regional authorities to achieve officially endorsed business outcomes like its counterpart in Mexicali. Conscious of this, Liu has prioritized engagement with Chinese and Mexican authorities in order to set the Association of Tijuana on a virtuous circle of diversified partnerships, more open disclosure of business activities and improved public relations.
A combination of administrative distance from Mexico City and creative policy-making has enabled officials in Mexicali and Tijuana to reach out to resident Chinese communities in an attempt to harness their strengths. By supporting commercial partnerships with China, facilitating trade fairs and inviting Chinese associations to conduct public festivals, administrators are discovering that their territories stand to gain when local social capital, guanxi and business networks are rationalized – sovereign and intact – into broader strategies of economic development.
Conclusion
Overseas Chinese communities in Latin America are uniquely positioned to broker trans-Pacific co-operation, and have begun to do so in Cuba and Mexico. The manner in which they engage with Mainland partners depends on the extent to which their activities are formally institutionalized. If policy makers are out of touch with local dynamics or lacking political will, then they will fail to elicit compliance and generate formal agreements. If, on the other hand, overseas Chinese communities are approached with regard for their historical development, priorities and ways of doing business, then the rationalization of their networks into official regulatory frameworks can bring local and national economic benefits. In the prior scenario, the ties binding domestic Chinese communities to business partners in China are likely to remain unregistered, limited in scope and only beneficial for small circles of ethnic entrepreneurs. In the latter, trans-Pacific ties are likely to be legally endorsed, publicly disclosed and broadly beneficial.
In Cuba, Barrio Chino's assimilation into a 21st-century system of civic governance is complicated by previous top-down regulatory designs. The commercial injunctions of the anti-Chinese movement, the nationalization campaign of the early Revolution, the monolithic acquittal procedures of the Central Havana municipal government and the rigid accountability codes of the Office of the Historian each reinforced the informal practices they set out to eradicate. While Barrio Chino harbours strong entrepreneurial capacities, local perceptions that commercial codes are too rigid and out of step with community priorities have discouraged compliance. The consequent profusion of undisclosed business ties and family connections within Barrio Chino and across the Pacific constitutes a significant challenge for policy makers. There are signs that more sophisticated approaches are now being formulated: the April 2011 Communist Party Congress recognized that locally sensitive regulations are a prerequisite if private enterprise is to alleviate pressure on the overburdened public sector and diminish the appeal of the black market. This recognition may herald new approaches to governance that permit Barrio Chino's informal business networks to function under legal sanction, in the process enticing them into formal registration and tax compliance.
In Mexico, media reports of substandard labour conditions in Chinese factories, coupled with public perceptions of domestic Chinese networks dedicated to importing and smuggling underpriced consumer goods, have fuelled fears of a Chinese “invasion.” This volatile environment has inhibited policy makers from openly engaging with resident Chinese communities to harness their local and global linkages for broader national benefit. The economic rewards of trade fairs and commercial networks operated by Chinese nationals and naturalized Chinese Mexican impresarios consequently remain restricted to group members, perpetuating a vicious circle of external hostility and internal solidarity. While creative strategies for breaking this cycle are yet to emerge in Mexico City, several branches of the Baja California state government have openly engaged with the Chinese Associations of Mexicali and Tijuana. Rationalization in northern Mexico has therefore begun to generate a virtuous circle of institutionalized co-operation with Chinese investors and opportunities for the placement of Mexican products in the Chinese market.
China's thickening ties with Latin America have brought new opportunities for overseas Chinese communities to enter into global business partnerships. Their pursuit of these opportunities, whether driven by internal interests or what Benedict Anderson has called “long-distance nationalism,” are recognized and praised in China.Footnote 65 China and Latin America stand to benefit if resulting connections develop in an open and legal manner. In the absence of locally sensitive policies and regulations, ethnic cleavages will widen; by contrast, open engagement with Chinese communities premised on respect for cultural history and business customs will produce mutually beneficial outcomes on both sides of the Pacific. The prospects for harmonious global integration with China may, in sum, depend on how effectively Latin American governments harness local ambitions.
