This paper attempts to analyse the contemporary relevance of the Chinese Diaspora to mainland China. The last ten years has seen a plethora of academic literature on the emergence of China as a superpower and the implications on current and future international relations globally. Despite China’s domestic population growth the continuing relevance of the Chinese Diaspora to the country’s economic and political future remains prominent. It is estimated that some fifty million people of Chinese nationality or with family links to China live outside of mainland China.

It is the sheer size of the Chinese Diaspora that enables it to retain a voice in their homeland. The Diaspora’s economic power, the size of its citizenship and the prevalence of Chinese ethnic solidarity is a new paradigm in international relations and political science and one that prescribes a ‘virtual nation’ negating the need for maintenance of sovereignty and super cedes the historical nation-state paradigm as the vehicle for the unification of people.

This paper will firstly examine the Chinese Diaspora and its complexities along with the diverse experience found within it. It will then cite specific examples of the Chinese Diaspora’s contemporary relationship with China, namely the economic relationship that has served to sustain China’s rapid economic rise and the nuances created by it. It will conclude that the Chinese Diaspora has been and will continue to be an integral player in the economic modernisation and growth of contemporary China.

Since the 1960’s, the world has seen an ever increasing level of population mobility across international borders (Zlotnik H. , 1998). This was traditionally known as ‘migration’, however in recent years the word “Diaspora” has curiously replaced it; the traditional use of the word “diaspora” was mostly restricted to explaining the dispersal of Jews from their homelands. [1] Scholars such as Cohen (Cohen, 1997) and Cheng and Katz (Cheng & Katz, 1998) have prescribed a much more liberal use of the term “diaspora” in their studies of migration in more recent years.

The term “diaspora” stems from the Greek words speiro (to sow) and dia (over) (Cohen, 1997) [2] or perhaps more literally ‘a scattering of people’ which bides well with Cohen’s interpretation of the word to describe the migration of all manner of nationalities and/or races. The Chinese Diaspora or huaqiao (Chinese sojourners), in English: ‘overseas Chinese’, is the term given to overseas Chinese who do not adopt another nationality with the view to returning to China. Overseas Chinese who assimilate to the culture of their adopted country and take citizenship are often referred to as huaren (Chinese people).

The earliest records indicate that the first Chinese Diaspora began to develop some five centuries ago when Chinese traders moved to countries in South East Asia (Cohen, 1997). Records also indicate that between 1800 and 1930 approximately three million Chinese were shipped out of China as slaves (Cohen, 1997). During the 1600’s and early 1700’s the Qing Imperial court treated travel overseas and/or overseas residence was seen as treason punishable by death (Zhou, 2009). 3] [4] Several waves of migrants are recorded as leaving China through the twentieth century to countries in the West where employment opportunities were abundant particularly in manufacturing. In 1949 many citizens left as a result of the Communist Party’s victory, migrating to the United States, Australia and Canada. The latter half of the 20th century had seen a shift in Chinese emigrants from a largely enslaved/indentured labour force to a labour force with professional skills or technical trade training.

The vast majority of the Chinese Diaspora originates from the southern provinces of China whilst others spent brief periods in Taiwan and Hong Kong before emigrating abroad. Deng’s Open Door Policy of the late 1970’s seen an increase in emigration and also an increase in foreign direct investment by the Chinese Diaspora. The Chinese state no longer viewed the Chinese Diaspora with distrust, rather, they seen them as a political and economic vehicle with the wherewithal both economically and politically to play a vital role in the industrialisation and modernisation of China.

In fact, the Chinese government undertook a period of actively engaging with the Chinese Diaspora (Cohen, 1997). Mansingh has identified several key themes within the People’s Republic of China (PRC) policies towards the Chinese Diaspora: the maintenance of nationality and citizenship of the Chinese Diaspora as paramount, the protection of the rights of the Chinese Diaspora, the attraction of capital, knowledge and skills to further China’s modernisation, and the pursuit of, and maintenance of China’s strategic and geopolitical influence in South East Asia (Mansingh, 1991).

The overriding patriarchal theme seen within these policies could be construed as a form of socialistic idealism; however, when considered within the context of a rapidly modernising state economy said policies are indeed quite intuitive in terms of their overriding role in the maintenance of stability in China’s political and economic ascendency. The political influence of the Chinese Diaspora has also been a prominent force in shaping the policies of the PRC.

For the PRC to ignore the voice of the Chinese Diaspora would have farther reaching implications than just that of the Diaspora’s populace; the collective voice of a disaffected Diaspora to its many host nations surely would be detrimental to China’s international relationships. The PRC has recognised this and set about incorporating the Diaspora into its modernisation and national reunification. The PRC administers the affairs of the Chinese Diaspora through the Overseas Chinese Affairs Office.

Broadly speaking todays overseas Chinese are characterised by both the traditional culture of their homeland: strength lies with family, respect for hard work, and a sense of nationalism, intertwined with the distinctive culture of their adoptive country but always with a distinctive ‘Chineseness’. [5] Perhaps the most prevalent instrument in the Chinese Diaspora’s relationship with mainland China is that of economic investment back into mainland China. This investment takes several guises namely remittances[6] from the Chinese Diaspora and foreign direct investment (FDI).

It has been estimated that the direct access liquidity of the Chinese Diaspora lies in excess of some $2 trillion (Lever-Tracy, Fu-Keung Ip, & Tracy, 1996). Lever-Tracy et al argues that the Chinese Diaspora’s direct investment in the coastal provinces of Guangdong and Fujian have been absolutely vital to their economic success. The Chinese Diaspora has also played a role in opening the up the Chinese economy to the foreign markets and the consequent exchange of commodities that has only added further gravitas to the modernisation of the Chinese economy and perpetuated capitalism and entrepreneurship.

Remittances remain a very important and reliable source of income for many Chinese families in the areas of Guangdong, Fujian, Zhejiang, Jilin, Liaoning, Shandong and Hebei Provinces. In 2010 remittances into China totalled (US) $51. 3 billion or over 1% of GDP, a phenomenal amount given the relative size of the Chinese Diaspora (World Bank, 2011). The role this liquid capital plays in the lives of resident Chinese families cannot be downplayed; these funds allow access to education, health care and basic consumption needs of which would not be met without remittances.

The role FDI by the Chinese Diaspora has also been a crucial part of China’s economic growth as they provided domestic capital for development when little was available domestically. The coastal provinces had been starved of capital by the Chinese government prior to Deng’s decentralisation due to disloyalty. With Deng’s open door policy these coastal regions and cities were deemed ‘open’ and were given special trade status and tax breaks to attract FDI.

Four Special Economic Zones (SEZ’s) were established within the areas where emigration was high with the aim of attracting further FDI. The Chinese state had strategically made FDI in China much easier and more attractive by accommodating the concerns of the Chinese Diaspora. Furthermore, foreign investors were afforded tax breaks and variable contracts, and the Chinese government pledged to refrain from nationalising foreign enterprises. The subsequent influx of investment by the Chinese Diaspora after this period was immediate.

China’s exports more than quadrupled between 1985 and 1994 and have continued to grow exponentially (Choundhary, 2001). The role the Chinese Diaspora played during this period and continues to play as an economic vestibule for the modernisation of rural provinces and coastal cities cannot be discounted, however, as China’s economic might continues to grow the need for FDI from the Chinese Diaspora is slowly diminishing and the PRC must look at other avenues and policies to maintain this vital interactive relationship.

Whilst the continuance of this FDI is no longer vital to China’s economic future what is important is to build on the foundations created by this model; the engagement that FDI has created between the PRC and the Chinese Diaspora is an extremely valuable strategic alliance that China can continue to use in other forms. Chinese diaspora communities have played a very strategic and vital role in what is now known as contemporary China.

This paper has set about explaining the Chinese Diaspora’s brief history and their role in the economic rise of China. The role of remittances and FDI from the Chinese Diaspora has been absolutely crucial to this rise, and in particular the rise of the coastal provinces as the manufacturing heart of China and one of the fastest growing regions in the world. The inflows of capital have served to secure the future of Chinese business and have secured China’s position in South East Asia and the Asia-Pacific region.

The role the PRC has played must not be downplayed either; for not for the SEZ’s there perhaps would not be the level of FDI there currently is. Whilst a broader discussion of the SEZ’s is not within the constraints of this paper it must be said that their role, specifically that of Taiwan & the emigrant rich regions of the south has been crucial to attracting this investment. The rise in prevalence of Diaspora investment in China has seen a complete turnaround of its southern provinces to what is now a rapid period of export driven growth.

It must be said also that the reciprocity shown between the PRC and the Chinese Diaspora; from the welcoming hand extended by the PRC post open door policy to the return home of the many overseas Chinese specifically to aid the states rise. Problems do remain however; the issue of human rights will continue to be an issue for some time for many overseas Chinese and may inhibit their engagement with the homeland. The level of freedom afforded to overseas Chinese by their host nations is not found upon their return home.

Domestic dissent is still quashed with haste and detractors are often jailed. The China-Taiwan divide also remains a very prevalent issue. Having said that, the very impetus of this discussion has been to better explain the relationship the Chinese Diaspora has had on mainland China and it is clear that for without the overseas Chinese the PRC would clearly not be in the position it is today economically or socially.