The Regionalization of Chinese Business Networks:

A Study of Singaporean Firms in Hainan, China*

Chia-Zhi Tan
National University of Singapore
Henry Wai-chung Yeung
National University of Singapore
This paper examines the central role of social and political institutions behind motivations and strategies of ethnic
Chinese Singaporean investment in Hainan, China. Drawing upon 22 case studies of Singaporean firms in Hainan, we
show that Singaporean investment in Hainan is embedded in Chinese business networks and their associated institu-
tions. At the personal level, direct investments are largely motivated by the cultural attachments of Singaporean Hain-
anese to Hainan. Their small- and medium-sized joint ventures largely reflect the characteristics of ethnically-based
Chinese business networks that stress connections, or guanxi. Similarly, the influence of social organizations (e.g., clan
associations) and government institutions (e.g., public and quasi-public agencies) on Singaporean investment strate-
gies in Hainan reveals the significance of ongoing social relations institutionalized at the broader societal level. Key
Words: embeddedness, institutions, Chinese business system, Singapore investment, Hainan, China.

Introduction world, are the most important source of for-

eign investment in China (The Economist 1992;

I n an increasingly competitive and interde-

pendent global economy, firms are con-
stantly compelled to maintain their competi-
tive advantages through dynamic organizational
and operational strategies. Today, one signifi-
cant competitive strategy commonly adopted
by firms is to engage in investments across na-
tional boundaries (Dunning 1993; Caves 1996;
Dicken 1998). Through this process of pursu-
ing foreign direct investments (FDI), a national
firm is transformed into a transnational corpo-
ration (TNC), defined as “[a] firm which has
the power to coordinate and control operations
in more than one country, even if it does not
own them” (Dicken 1998, 8). The worldwide
operations of these TNCs potentially allow
them to reap advantages arising from national
differentials and therefore to remain globally
competitive. The opening of China to the
global economy since December 1978 created
tremendous market and investment opportuni-
ties for TNCs from outside of the Asia Pacific
region. To date, ethnic Chinese investors from
East Asia (e.g., Hong Kong, Macau, and Tai-
wan), Southeast Asia, and other parts of the
East Asia Analytical Unit 1995; Lin 1997; Hay-
ter and Han 1998; Hsing 1998; Huang 1998).
The extensive and powerful system of Chinese
business networks is also recognized as the main
driving force behind some of the world’s fastest
growing economies in East and Southeast Asia
(Sender 1991; Whitley 1992; Kao 1993; Yeung
and Olds 2000).
As a city-state in Southeast Asia with a ma-
jority ethnic Chinese population, Singapore has
shown a strong propensity to establish close
economic relationships with China. This is
supplemented by Singapore’s recent drive to-
wards the regionalization of its national firms
to maintain its competitiveness in the global
economy. The promotion of overseas invest-
ment was mounted when Singapore registered
its first gross domestic product (GDP) decline
since independence in 1985. Then the Eco-
nomic Committee for Overcoming Recession
identified overseas investment and the devel-
opment of offshore business opportunities as a
long-term solution to the lack of investment
and market opportunities in Singapore. Sin-
gapore is constrained by its small domestic

* We would like to thank Stuart Aitken and three anonymous reviewers for their constructive comments on an earlier version of this paper. The
Lee Foundation in Singapore generously funded the fieldwork for this study. Thanks also to Mrs. Lee Li Kheng for drawing Figure 1. Some
materials in assisting the revisions of this paper originate from ongoing research into the regionalization of Singaporean firms funded by the
National University of Singapore (RP960045 and RP970013). As usual, all errors and mistakes are our own responsibility.

Professional Geographer, 52(3) 2000, pages 437–454 © Copyright 2000 by Association of American Geographers.
Initial submission, September 1998; revised submissions, January 1999, May 1999; final acceptance, June 1999.
Published by Blackwell Publishers, 350 Main Street, Malden, MA 02148, and 108 Cowley Road, Oxford, OX4 1JF, UK.
438 Volume 52, Number 3, August 2000
population and market size, as well as limited
labor and land which accentuate the need to
develop an external economy (Yeung 1998a,
1999a). Since the establishment of official dip-
lomatic relationships between China and Sin-
gapore in October 1990, Singaporean invest-
ment in China has increased substantially (Kanai
1993; Cartier 1995; Lu and Zhu 1995; Tan
1995). An investment strategy involving the di-
rect participation of Singapore’s government-
linked companies (GLCs) in China’s industrial
development has evolved.1 Singaporean invest-
ment in China has extended spatially from the
traditional ancestral regions of Fujian and
Guangdong to various Sino-Singapore indus-
trial parks in such non-ancestral locations as
Suzhou, Wuxi, Ningbo, and Sichuan in China
(Fig. 1). These patterns of regionalization re-
sult largely from the political arrangements and
inter-firm collaborations of large GLCs, local
firms, and foreign companies in Singapore.
Much less public and research attention has
been paid to the role of social and business net-
works in influencing the spatial organization of
Singaporean investment in China.
This public and intellectual lacuna originates
primarily from what economic sociologist Mark
Granovetter (1985, 483), called the “underso-
cialized” view of economic action most com-
monly held by neoclassical economists. To
them, economic action such as cross-border in-
vestment is determined by abstract economic
logic of costs and benefits. The “economic”
sphere therefore has an independent and self-
driven existence outside all other spheres of so-
cial life. We do not subscribe to this view of
economic action. In fact, there is now an in-
creasingly significant call by economic geog-
raphers to re-examine the concept of the “eco-
nomic” itself (Dicken and Thrift 1992; Thrift
and Olds 1996; Lee and Wills 1997; Schoen-
berger 1997). Using the concept of networks,
economic geographers and sociologists show
that economic action is often embedded in
webs of ongoing social relations constituted in
and through space (Yeung 1994a, 1998b;
Dicken et al. 1998; see also Swedberg 1990;
Granovetter and Swedberg 1992; Smelser and
Swedberg 1994). As argued by Thrift and Olds
(1996, 322), “[t]he topological presupposition
of the network is now in common usage in the
social sciences as the emblem of an ambition to
produce flatter, less hierarchical theories of the
economy.” These network theories have in-
deed placed a much greater emphasis on the so-
cial and institutional foundations of economic
transactions in today’s global economy.
In this paper, we aim to provide insights into
these social and institutional mechanisms
through which Singaporean firms have in-
vested in China, with a particular emphasis on
the province of Hainan (see Fig. 1). Specifi-
cally, we evaluate the extent to which social and
cultural reasons have attracted Singaporean in-
vestment to Hainan. We adopt an institutional
perspective and theorize the embedded rela-
tionships between cross-border investments
and Chinese business networks (see also Yeung
1998e). We argue that social ties and business
networks between Singaporean Hainanese and
their counterparts in Hainan have been institu-
tionalized at different levels. We define insti-
tutions as social structures organized through
common purposes and shared values. These in-
stitutions range from family ties to clan associ-
ations to state agencies. At the personal level,
familism is an important attribute inscribed in
the cultural institutions of ethnic Chinese
through shared family and/or clan norms and
values. Many family-oriented business transac-
tions between Singapore and Hainan are em-
bedded in these forms of cultural institutions.
Beyond the family domain, trust and guanxi
(defined as connections and interpersonal rela-
tionships) between business partners also pro-
vide the necessary social relations to sustain
cross-border economic activities. At the broader
societal level, such voluntary organizations as
chambers of commerce and clan associations
serve as the institutional mechanism to reduce
the “friction of distance” and potential prob-
lems in the Hainan operations by Singaporean
firms. Together, these important social and cul-
tural institutions play a significant role in shap-
ing the investment strategies and economic orga-
nization of Singaporean firms in Hainan. These
firms include relatively small-scale personal busi-
nesses (loosely organized by kinship relation-
ships), medium-scale joint ventures and large-
scale investments by modern corporations.
The next section briefly outlines the histori-
cal linkages between Singapore and China to
set the social and geographical contexts of this
paper. This is followed by an exposition of an
institutional framework in organization studies.
The main empirical section examines the vari-
 Regionalization of Chinese Business Networks 439

Figure 1: The location of Singaporean investments in Hainan, China. Source: Authors’ field research.
440 Volume 52, Number 3, August 2000
ous linkages between Singaporean firms and
Hainan on the basis of this institutional frame-
work. Our analysis is based on 22 case studies
and field interviews.2 The concluding section
summarizes the findings and highlights some
implications for future research into the cross-
border operations of Chinese business networks.
Historical Linkages between
Singapore and China
During the nineteenth and early twentieth cen-
turies, Chinese immigrants arrived at Sin-
gapore from traditional emigrant areas in the
southern coastal provinces of China such as
Guangdong, Fujian, and Hainan. The break-
down of Singaporean Chinese in terms of their
dialect groupings is given in Table 1. Histori-
cally, Singaporean Chinese have maintained
strong linkages with their immediate family
members or close relatives in China (Cheng
1985, 1990; Wang 1991; Xing et al. 1991; Yen
1995). They continuously exchanged letters,
sent remittances, and actively contributed do-
nations for various social purposes (e.g., build-
ing schools) (Cheng 1990). Chinese clan asso-
ciations in Singapore also extended their
activities into their home villages, districts,
prefectures, and provinces to keep emigrants
informed of their motherland’s prevailing situ-
ation. During the politically unstable periods
of the 1950s and the 1960s, an important insti-
tution contributing to the continual commer-
cial relations between Singapore and China
was the Bank of China.3 In the absence of
China’s official diplomatic representation in
Table 1 Dialect Groupings of Chinese Residents
in Singapore
Number
Total
(Chinese residents in
Singapore only) 2,102,795
Hokkien 886,741
Teochew 461,303
Cantonese 319,322
Hakka 153,942
Hainanese 146,629
Foochow 35,883
Kenghua 19,776
Shanghainese 16,676
Hockchia 13,065
Others 49,458
Source: Department of Statistics, Singapore (1991)
Singapore prior to 1981, the Bank of China
served as a semi-official representative of China
and facilitated commercial, trade, and other con-
tacts between the two countries (Chin 1988).
Prior to the 1980s, Singaporean investment
in China was minimal due to the fear of Com-
munist China, Cold War tensions, and the sen-
sitivities of neighboring Southeast Asian coun-
tries. Singapore’s commercial linkages with
China were mainly conducted through trade.
Since 1980, the level, variety, and extent of
Sino-Singaporean contacts has increased as a
result of political and economic changes in the
region (e.g., the economic reform of China and
the normalization of diplomatic relations be-
tween China and Singapore’s neighboring
countries). Total trade with China experienced
dramatic increases in the last two decades (see
Fig. 2). Singaporean companies also ventured
more into direct investment projects in China
(see Fig. 3). During the 1983–1996 period, Sin-
gapore invested some US$6.17 billion in China
(measured by actual realized FDI value) and
was ranked fifth largest foreign investor after
Hong Kong (US$101.3 billion), Taiwan
(US$14.9 billion), U.S. (US$14.2 billion), and
Japan (US$14.0 billion) (Sun 1998, Appendix
A). In terms of cumulative Singaporean equity
investment abroad by 1995, some S$2.4 billion
or 6.6% went to China (Department of Statis-
tics 1998, Table 5.13).4 This placed China as
the fourth largest recipient of Singapore’s eq-
uity investment abroad, after Malaysia (S$7.3
billion), Hong Kong (S$5.1 billion), and Indo-
nesia (S$3.4 billion). In 1996, Singapore’s in-
vestment in China surged some 44% to S$5.3
billion, placing China as the third largest host
country for Singapore’s investment abroad
(The Straits Times 1998).
Early investment from Singapore was spa-
% tially concentrated in southern coastal cities
and provinces. During the 1980s and the 1990s,
these provinces became key centers of eco-
100% nomic growth. Five special economic zones
42.2 (SEZs) were established in these provinces:
21.9 Shenzhen, Zhuhai, Xiamen, Shantou, and
15.2
7.3 Hainan. The first three SEZs were launched in
7.0 1980, Shantou in 1981, and the latest, Hainan
1.7 in 1988. Previously a part of Guangdong,
0.9
0.8 Hainan Island was redesignated as a province
0.6 and granted the status of a SEZ in 1988 as an
2.4 attempt by Beijing to resolve its “Hainan prob-
lem” (Feng and Goodman 1995). The Beijing
 Regionalization of Chinese Business Networks
Figure 2: Singapore’s total trade
with China, 1978–1996. Source:
Department of Statistics, Singa-
pore (1998).
government intended to make Hainan a “test-
ing ground for many of the comprehensive,
market-based reforms whose implementation
throughout China is planned over the medium
term” (Cadario et al. 1992, vii).
Apart from enjoying all privileges granted to
other SEZs, Hainan was bestowed with free-
dom to adopt a more liberal economic system
because the Beijing government wanted to at-
tract as many foreign investors as possible to
help “kick-start” its sluggish economy. Hainan
was encouraged to have a “small government
and large society,” implying less involvement
by state-owned enterprises and minimal gov-
ernment intervention in the economy (Cadario
et al. 1992). For example, in order to set up a
new firm, an investor in Hainan today needs
only to register once at the Administrative Bu-
reau of Industry and Commerce without seek-
ing approvals from other ministerial units (Feng
and Goodman 1995, 24). Another example is
that a developer can buy a piece of land below
100 mu (approximately 6.67 hectares) from the
Figure 3: Singapore’s equity
investment in China, 1985–1995.
Prior to 1985, Singapore’s in-
vestment in China was too
minimal to be recorded in the
Yearbook of Statistics. Source:
Department of Statistics, Singa-
pore (1997).
441
county government without seeking prior ap-
proval from the provincial government (field
interview, February 1998).
Ethnic Chinese abroad were the most im-
portant source of foreign capital in Hainan
even before the establishment of the People’s
Republic of China (PRC) (Xing et al. 1991;
Dangdai Zhongguo de Hainan 1993; Feng and
Goodman 1995, 1997). They introduced many
important tropical cash crops and founded
modern factories, schools, and hospitals. Many
enterprises in Hainan were established through
capital remitted by ethnic Chinese of Hainan
origin living abroad. The declaration of Hainan
as a separate province and SEZ in 1988 re-
energized the Hainanese communities around
the world. These Hainanese abroad now take a
more direct investment strategy to help Hainan’s
growth and development (East Asia Analytical
Unit 1995). Today, ethnic Chinese abroad ac-
count for more than 80% of total investment in
Hainan (Feng and Goodman 1995, 76). In terms
of realized foreign investment, Singapore was
442 Volume 52, Number 3, August 2000
Table 2 Hainan’s Realized Foreign Investment
from Asian Countries
Country 1996 Rank 1995
Total
(US $ million) 1,189.6 1,455.0
Hong Kong 376.6 1 564.4
Japan 146.9 2 189.8
Singapore 83.8 3 73.8
Taiwan 79.9 4 78.7
Thailand 19.8 5 22.9
Korea 11.9 6 14.1
Malaysia 9.5 7 16.1
Indonesia N.A. 8 1.7
Source: Hainan Jingji Nianjian (1996, 1997)
N.A. 5 Not Available
ranked third in 1996 (see Table 2). In relative
terms, Singapore’s investment in Hainan is as
important to the host province as that in
Guangdong, Fujian, and Jiangsu. In fact, Sin-
gapore’s investment in these latter provinces
hardly exceeds that from Hong Kong, Taiwan,
and the U.S. (Yeung 2000c).
An Institutional Framework for
Analyzing Business Networks and
Overseas Investments
There is now a significant body of empirical
study examining Singapore’s investment in
China (Pang and Komaran 1985; Lim 1990;
Cartier 1995; Lu and Zhu 1995; Tan 1995;
Yong 1995). Among other relevant literature
on the regionalization of Singaporean firms,
most work included some discussions of Sin-
gapore’s FDI in China (e.g., Kanai 1993; Lee
1994; Pang 1994, 1995; Yeung 1998a, 2000c).
Table 3 shows the determinants of Singaporean
investment in China as suggested by various
studies. We identify, however, several weak-
nesses in these earlier studies. First, they placed
too much emphasis on the role of the home
country government (i.e., the influence of pub-
lic and quasi-public agencies). Much less em-
pirical research was done on the historical link-
ages between Singaporean Chinese and their
ancestral lands that may have motivated Sin-
gaporean investment in the southern coastal
provinces. Second, most studies have examined
Singaporean investment in two large provinces
in south China (Guangdong and Fujian) and
Jiangsu (which hosts Singapore’s Suzhou In-
dustrial Park). Other provinces and regions in
China received less attention from these studies.
Table 3 Determinants of Singapore’s FDI in China
Social Reasons
Rank Historical Affinity • Ethnic ties with ancestor land
(particularly with Guangdong,
Fujian, and Hainan Province)
• Close historical and cultural links
1 Cultural-Language • Similar spoken dialects with their
2 Similarities ancestral provinces
4
Familiarities with • Familiarities of the Chinese busi-
3
China ness culture (e.g., personal net-
5
works relations based on trust)
7
• Willingness of the Chinese to do
6
business with Singaporean
8
Chinese
Economic Reasons
China’s Economic • Open door policy and moderniza-
Reform tion movement since 1979
• Favorable economic incentives to
attract foreign capital, technologi-
cal and managerial expertise
• Designation of Special Economic
Zones (SEZs) and opening-up of
coastal regions
Singapore’s • Need of Singapore to develop an
Limitations external economy
• Taxation incentives and financial
assistance for Singaporean firms
to regionalize
• Constraining land factor and
increasing cost of labor
• Policy shift to “transfer” labor-
intensive operation from Sin-
gapore to the region
China’s • Large consumer and factor markets
Opportunities • Availability of cheap labor and land
Political Reasons
Singapore-China • Establishment of diplomatic rela-
Diplomatic Relations tions in 1990
Singapore’s • Development of Singapore-China
Regionalization industrial parks
Drive • Government-led large-scale
investments (through govern-
ment-linked companies or GLCs
joint ventures with other private
Singaporean companies)
• Ministerial visits by Singapore top
senior politicians to China
Sources: Pang and Komaran (1985), Lim (1990), Kanai (1993),
Lu and Zhu (1995), Tan (1995), Pang (1994,1995)
Third, there is a bias of empirical studies to-
wards manufacturing industries (e.g., Lee 1994)
at the expense of service industries (e.g., tour-
ism, hotels, real estate, etc.) and primary indus-
tries (e.g., agriculture and plantations). Finally,
the explanatory matrix of most studies focuses
on economic reasons such as cost reduction
and market potential in China. Virtually none
of them examines the role of social and institu-
tional mechanisms in facilitating Singaporean
investment in China.
 Regionalization of Chinese Business Networks
We do not intend to suggest an alternative
explanatory framework for the organizational
dynamics of Chinese business (see Jamann
1994a; Menkhoff 1994; also Limlingan 1986;
Chan and Chiang 1994; Brown 1995; East Asia
Analytical Unit 1995; Lasserre and Schütte
1995; Hodder 1996; Weidenbaum and Hughes
1996; Yeung 1998c). The purpose here is to
construct an explanatory framework relating
existing analytical features of Chinese business
organizations, the institutional environment in
which they operate and their investment strat-
egies in China. We draw upon the recent work
by Orrù et al. (1997) that explores the eco-
nomic organization of East Asian capitalism
(Hamilton 1991; Brown 1995; Westney 1996;
see also Powell and DiMaggio 1991). We argue
that economic and organizational activities
should not be viewed as being separated from,
but rather as embedded within society. The an-
alytical focus here is on the institutional envi-
ronment and the socially constructed norma-
tive world in which business organizations
operate. In fact, this social and institutional
embeddedness of firms is confirmed by recent
studies in economic geography (Amin and Thrift
1994; McDowell and Court 1994; Schoen-
berger 1994, 1997; Gertler 1995; McDowell
1997; Clark 1998b; Cooke and Morgan 1998;
Hudson 1998; Thrift 1998; Amin and Cohen-
det 1999; see Yeung 2000a). Schoenberger, for
example, suggests that we should “consider
how the firm is constituted as a society, how it
constructs its identity, and the relationship be-
tween culture, identity, knowledge, and action”
(1997, 108). To her, corporate cultures and
managerial identities structure the institutional
context in which inertia exists to prevent pos-
sible changes in corporate behavior and action.
What then constitutes this emerging institu-
tional framework for analyzing business orga-
nizations? According to Orrù et al. (1997),
there are four elements in an institutional the-
ory of economic organizations. First, an insti-
tutional explanation begins with the premise
that actors are not isolated and are not purely
self-interested individuals conceived in neo-
classical economic models. Any business activ-
ity such as an investment strategy or organizing
business structures is not asocial, but is deter-
mined by the social behavior of individuals in
society. Second, economic and organizational
activities are socially embedded in that individ-
443
ual actors develop mutually agreeable means of
business conduct and these practices are rou-
tinized through economic institutions. Organi-
zational and ideological arrangements are
developed to sustain these institutionalized
economic patterns. Research into the role of
culture and social norms in London, for exam-
ple, shows that the economic behavior of trad-
ers and brokers continues to be locally embed-
ded in their knowledge and information
networks (Thrift 1994; Tickell 1996; Clark
1997). These networks provide the institu-
tional foundation of economic transactions in
London. The nature of this embeddedness of
economic activities and organizations is deter-
mined by the institutional setting of a particu-
lar place. Orrù et al. (1997, 26) note that “[t]he
networks of relations, social beliefs, gender and
family structure, and other institutionalized
forms of social order such as the state and reli-
gion vary across societies [and space].”
Third, as a “legitimating principle that is elab-
orated in an array of derivative social prac-
tices,” organizational logic informs us about
business relations as well as social relations in
other institutions of that particular society
(Orrù et al. 1997, 26). The application of com-
mon organizational logic both across and be-
tween societal sectors results in the tendency
for organizations within the same institutional
environment to resemble each other. This in-
stitutional logic explains why, despite the ho-
mogenizing tendencies of globalization, national
firms from different social and institutional
contexts continue to exhibit enduring organi-
zational differences (see Whitley 1992, 1998;
Pauly and Reich 1997; Yeung 1998d, 2000c). In
this paper, we identify different institutional
spheres such as the family, the polity, and the
economy. These different spheres tend to use
similar logic to organize and structure eco-
nomic interaction. Hence, exploring any
sphere offers related explanations of a phe-
nomenon in another domain (see empirical
analysis in the next section). Fourth, an insti-
tutional perspective on economic action offers
a multilevel and multidimensional analysis
that takes into account the micro-level such as
individual actors and agencies, as well as the
broader macro-structural environment.
Based on these central tenets of an institu-
tional framework, we examine the motivations
of Singaporean investment in Hainan and the
444 Volume 52, Number 3, August 2000
Figure 4: An institutional analysis of Singaporean investments in Hainan.
nature of organizational structure in two broad
interdependent domains—individuals/firms
and institutions (Fig. 4). We argue that both in-
vestment strategies and organizational struc-
tures of Singaporean Chinese firms in Hainan
are embedded in institutional environments
comprising the family, the Chinese business
system, voluntary organizations, and state in-
stitutions. These institutions influence the mo-
tivations and rationality of individual Sin-
gaporeans when they make decisions to invest
in Hainan. We argue, therefore, that apart
from the economics of FDI, the motivations
and mechanisms of Singaporean investment in
Hainan can be explained by institutional factors.
At the level of the family as a central social in-
stitution in Chinese societies (see Fig. 4), the
importance of ancestry inscribed culturally in
the mindset of Singaporean Hainanese sug-
gests a sense of kinship attachment to Hainan.
Similarly, the modes of foreign entry by Sin-
gaporean firms, particularly through joint ven-
tures and cooperative strategies, reflect their
embeddedness in strong ethnicity-based net-
work relationships. Some joint ventures involv-
ing partnerships with local Chinese institutions
also demonstrate the significance of guanxi in
the business practices of Singaporeans in China.
On the other hand, such social institutions as
clan associations often help to create a favorable
“atmosphere” to encourage Singaporean invest-
ment in Hainan. Liu’s (1998) recent study of the
globalization of Chinese voluntary associations,
for example, shows that these social institutions
play a very important role in facilitating the
globalization of Chinese business firms. As
shown in Figure 4, political-institutional forces
may also affect the conduct of Singaporean in-
vestors in Hainan who seek guanxi with host
political actors. This process of institutionaliz-
ing bilateral business relationships between
two countries has been termed “political entre-
preneurship” (Yeung 1998a, 2000c).
Institutional Influences and
Singaporean Firms in Hainan, China
In our study, we found that institutional forces
have a significant influence on Singaporean in-
vestment in Hainan. These institutional forces
emerge from different spheres of a society (see
Fig. 4). In the following subsections, we exam-
ine how these spheres shape the strategies and
motivations of Singaporean investment in
Hainan. We start with cultural institutions and
discuss the role of familism and business net-
works in influencing Singaporean investment
in Hainan. We then proceed to examine the
 Regionalization of Chinese Business Networks
significance of such broader organizational in-
stitutions as voluntary organizations and state
institutions.
The Role of Familism and Ancestry in
Singaporean Investment in Hainan
Our research shows the importance of familism
in driving Singaporeans to invest in Hainan.
Familism, and a sense of ancestry, are of para-
mount importance in the sociocultural system
of ethnic Chinese. According to Redding
(1990, 2), familism is a central value still well
embedded in the mindset of most ethnic Chi-
nese abroad. In an authoritative account of
Chinese philosophy, Fung (1948, 21) describes
the family system as a social system of China
and ancestor worship as the basis of Chinese
culture. This principle of familism extends to
successful kin groups through the concept of
lineage.5 Most settlements or villages in the
southern provinces of China, including Hainan,
are basically constituted of, and cemented by,
one lineage originated from a common ancestor
(Baker 1979, 49).6 Filial piety, the core virtue of
familism, also plays a part in inculcating a strong
tradition of ancestral worship and kinship.
Many Chinese business enterprises in Asia
are indeed embedded in the principle of famil-
ism (see Brown 1995; Yeung 1997, 1998c,
1999b; Olds 1998; Tong and Yong 1998).
Structurally, family ties are important in ce-
menting the internal core of Chinese enter-
prises. In other words, familism tends to sustain
ownership bonds. A good example is Sam Son
Travel Service, currently managed by Mr. Wil-
liam Tan, a fourth-generation owner of the tour
agency. Two other companies, Metropole Ho-
tel and Hoe Leong, are currently managed by
the children of the founding entrepreneurs. In
Metropole Hotel, its Hainan subsidiary is man-
aged by the wife of Mr. Lee (the founder-owner
of Metropole Hotel) and some of his close rel-
atives from the same lineage. Likewise, four
brothers of the same family manage Hoe Le-
ong’s regional subsidiaries in Hainan, Guang-
dong, Malaysia, and Indonesia. Both examples
present a good case of strong intra-firm net-
works based on high level of trust embodied in
family-based organizational structures.
Traditionally, Singaporean Hainanese main-
tained very close social relationships with Hainan
even though they were geographically far apart.
With the declining threat of communism and the
445
establishment of the Chinese Trade Mission in
Singapore in 1981, more Singaporean Chinese
were allowed to visit China on personal social
grounds. Since then, Singaporean Hainanese
gradually embarked on “home-visiting” tours
to their ancestral homeland in Hainan. These
forms of personal attachment to Hainan reflect
the importance of ancestry and familism in the
cultural value of Singaporean Hainanese. Since
the establishment of Hainan as a province and
SEZ in 1988, a significant number of Sin-
gaporean Hainanese moved away from their
traditional forms of sociopersonal linkages
with Hainan and began to engage in direct in-
vestment in the island. A majority of 14 firms
out of the 22 case studies belong to Hainanese
owners. Most of them cited family reasons as
one of their motivations to invest in Hainan.
They also brought up sentimental reasons and
nostalgic feelings for zhuguo or their “mother-
land.” However, this sense of attachment to
their ancestry in Hainan varies across genera-
tions. The respondents’ place of birth and per-
sonal experiences play a part in determining
the intensity of their emotional attachment to
Hainan. In this study, two groups of Sin-
gaporean Hainanese with different levels of
personal attachments are identified: 1) the
older generation Singaporean Hainanese and
2) the younger generation Singapore-born
Hainanese.
From our survey, one group of Singaporean
investors in Hainan who are highly motivated
by cultural reasons belongs to the older genera-
tion Singaporean Hainanese. They are either
Hainan- or Singapore-born Hainanese. One
commonality among them is that they have
lived in Hainan for a significant period of time.
These elder Hainan-born Singaporeans are
mostly in their late 60s and possess strong nos-
talgic feelings for their ancestral villages and
hometowns. Patriotism is another motivation
for these “homeward” investments from Sin-
gapore. Some of these elders have retired and
resettled in Hainan. They have invested mostly
in small hotels or lodging apartments in their
ancestral towns which are often the administra-
tive towns of their ancestral villages. Some-
times, they live in their own small hotels for
as long as six to twelve months each year.7
Two Hainan-born Singaporean interview-
ees, Mr. Liang (Jinghua Hotel) and Mr. Foo
(SINFenghuang Hotel) come from this group
446 Volume 52, Number 3, August 2000
of resettler-elder investors. There are also nu-
merous other unverified accounts of Sin-
gaporean Hainanese living in their ancestral
hometowns on their own invested properties.8
Another group of Singaporean Hainanese
who voiced personal feelings as one of their
reasons for investing in Hainan is the younger
generation Singapore-born Hainanese. Mr. Lim
from Lion City Resort noted that:
Basically, we go there because we are Hainanese—
number one. Number two, we also come from
Wenchang—our roots are there—our ancestors
from there. . . . Number three, the land is quite
reasonable, beachfront, hard-to-come-by. (In-
terview in Singapore, 22 December 1997)
Another respondent, Mr. Hoe from Hoe Major
Property, also cited social reasons for his in-
vestment in Hainan:
It’s a social reason because I am a Hainanese;
some effects also because of my Chinese educa-
tion. I want to see how I can contribute to my
professional areas in Haikou. (Interview in Sin-
gapore, 26 January 1998)
Both respondents are first-generation Sin-
gapore-born Hainanese in their late 40s. Com-
pared to their older Hainanese seniors, they do
not possess a similar extent of nostalgic feelings
for Hainan because of their lack of personal ex-
perience with their ancestral homeland. How-
ever, the fact that they revealed their obligatory
feelings for Hainan shows the influence of Chi-
nese culture as an institutionalized system in
which they were raised. Their sense of attach-
ment to Hainan may be strengthened indi-
rectly by their parents and other Hainanese se-
niors. Due to their filial piety to their parents,
the same family value of ancestral attachment is
naturally extended to Hainan. For example,
Mr. Lim followed his parents’ tradition of
sending remittances to their relatives in
Hainan. He believed that since his roots came
from Hainan and his parents had the tradition
of contributing to Hainan, he should be simi-
larly inclined.
Ethnicity-Based Business Networks of
Singaporean Firms in Hainan
Outside the family domain, two important as-
pects of familism, trust and connections, con-
tinue to form the basis for other personalized
relationships among ethnic Chinese abroad. A
strong guanxi can only be established and im-
proved through personal and social interac-
tions. Personal relationships developed among
family, friends, classmates, or colleagues can be
translated into strong business connections and
networks in a Chinese business system (see
Whitley 1992). Many authors observed the im-
portance of trust and friendship9 in Chinese
business networks (Menkhoff 1994; Jamann
1994a, 1994b; Tracy and Ip 1995; Weidenbaum
and Hughes 1996; Yeung 1997; Haley et al.
1998; Tong and Yong 1998; see also Olds and
Yeung 1999). Such culturally specific concepts
as mianzhi or “keeping face” are used to sup-
port the extension of trust from the level of so-
cial hierarchy (i.e., family) to the level of com-
munity circles (i.e., non-kin acquaintance).
Trust and friendship improve simultaneously
over time.
Trust is an essential precondition for trade
and investment. The reliance on trust and
guanxi is particularly pronounced in doing
business in China (Smart and Smart 1991;
Davies et al. 1995; Yeung and Tung 1996; Luo
and Chen 1997; Tsang 1998; cf. Guthrie 1998).
From our research, a number of Singaporean
Chinese investments engaged in one specific
form of cooperative strategy—joint ventures.
Joint ventures are established on the basis of di-
alect affiliation, business associates, and per-
sonal friends. For example, the Lion City Con-
dominium project is a joint venture based on
dialect affiliation. According to Mr. Hoe (one
of the developers), “all of these 21 shareholders
are Hainanese” (Hoe 1998). In the case of
Haixin Investment Pte Ltd, a network of ten
business friends from related industries (mainly
construction and real estate industries) formed
an investment company to jointly develop a
parcel of land in Hainan. Although half of the
shareholders are Hainanese, this network is not
based entirely on dialect grouping, but also on
business associations. Mr. Lim, the managing
director of the Haixin, is a Hokkien. He was
elected to be the managing director of the
company because he has the highest relevant
educational level (Bachelor of Commerce) and
management capabilities. Mirroring their
mutual trust and relationships, the decision-
making process in this collaborative network is
such that “all come down together to discuss
and make decision” (Lim 1998). Lion City Re-
sort is another joint venture that exemplifies
the kind of guanxi bonds in Chinese business
 Regionalization of Chinese Business Networks
networks. Mr. Lim and Mr. Foo are partners in
this joint venture project. On how they came
together in this investment, Mr. Lim replied
that:
we went for [a] tour and Mr. Foo is my ex-
teacher’s brother. And then . . . we like the land
. . . I was the one who proposed “Why don’t we
buy the piece of land and do something?” (Inter-
view in Singapore, 22 December 1997)
In this subsection, we examine how Sin-
gaporean Chinese business networks are em-
bedded in the principle of trust and connec-
tions. These connections, however, are not
limited to private business firms and busi-
nesspersons. They are also observed in busi-
ness ties promoted by such voluntary organiza-
tions as clan associations and other social
groupings, as well as state institutions. Benefits
such as insider information about good busi-
ness opportunities are often derived from
memberships in these social/political institu-
tions and having good connections with other
members.
Ethnic Lineage, Clan Associations,
and Commerce Associations in
Singapore’s Regionalization
Early Chinese emigrants were detached from
their customary methods of organization along
kinship lines (Baker 1979; Hodder 1996; Liu
1998).10 In order to acquire the synergy of
grouping, they had to find ways to connect with
one another. Baker (1979, 170) noted that they
“were well convinced of the value of kinship as
an organizational principle, and looked to kin-
ship models as they institutionalized their lives
abroad.” As a result, several organizational
models based on kinship, speech group affilia-
tion, and strong regional allegiance were cre-
ated in host countries to sustain the institution-
alized social and cultural values of ethnic
Chinese. Cheng (1985, 36) also argued that “it
is obvious, then, that the establishment of asso-
ciations outside China by the Chinese repre-
sents the transplanting of a Chinese tradition
overseas.” Being an extended form of familism,
lineage of the same surname ancestry was con-
sidered as one of the most important forms of
institutional support for ethnic Chinese
abroad. In Singapore, as well as among other
places with Chinese inhabitants, the clan associ-
ation is an important social institution that
amalgamates scattered groups of related lin-
447
eage, either bearing the same surname or from
a common dialect group or ancestry locality.
Historically, such Hainanese clan associations
as the Singapore Hainan Hwee Kuan and other
Hainanese clan associations bearing the same
surname provided a good avenue for Hain-
anese emigrants to establish personal relation-
ships with their fellow emigrants and to keep in
touch with their mainland kin. Other social
functions of these clan associations were “to
provide mutual help, assistantships, bursaries,
loans, and scholarships for the children of the
members” (Cheng 1990, 59).
Another form of non-kin organizations is the
chamber of commerce or social societies formed by
businesspersons or other social leaders. As clan
consciousness gradually lost importance, the
younger generation Hainanese businessper-
sons have taken the initiative to form the
Hainan Society to renew and sustain their
groupings more on the basis of economic ben-
efits. Unlike the traditional clan associations,
the Hainan Society focuses more on introduc-
ing and establishing business connections
among Singaporean Hainanese as well as link-
ages with China. At the broader institutional
level, such non-governmental agencies as the
Singapore Federation of Chinese Clan Associ-
ations (SFCCA) and the Singapore Chinese
Chamber of Commerce and Industry (SCCCI)
were established to coordinate and develop fur-
ther social and economic linkages among all
ethnic Chinese in Singapore, irrespective of
their dialect affiliations.
One of the benefits of being members of
these associations is the establishment of con-
nections. Connections, in this case, exist in two
forms: 1) connections with local (i.e., Sin-
gapore) businesspersons and 2) connections
with foreign (i.e., Hainan) business and politi-
cal parties. Recent studies of Chinese business
(e.g., Cheng 1985; Yeung 1997; Liu 1998) ac-
knowledge that participation in associations
and other ethnic groupings can enhance one’s
personal contacts and is vital for business ex-
pansion and greater cooperation. In addition,
valuable overseas linkages with local Hainan
institutions can be established via these associ-
ations. Connections with home villages, towns,
and cities in Hainan have become a crucial
business advantage for Singaporean busi-
nesspersons when investing in an imperfect le-
gal and business environment (e.g., Hainan). In
448 Volume 52, Number 3, August 2000
our study, Singaporean investments such as the
Lion City Condominium and some of Mr. Le-
ong’s (of Great Link Investment) businesses in
Hainan are embedded in social and clan associ-
ations. Most of the shareholders in the Lion
City Condominium project are members of the
Hainan Society. Being members of the Hainan
society, they have benefited from receiving
first-hand insider information about business
opportunities in Hainan.
On the other hand, Mr. Leong holds an im-
pressive portfolio of appointments with several
social and commerce institutions in both coun-
tries (see Table 4). Through these appoint-
ments, he established many important personal
contacts with Hainan’s top political figures (see
Table 4B). According to Mr. Leong himself:
I was formerly the Director of Foreign Affairs
Department of Hainan Hwee Kuan . . . Those [of-
ficials] who came from Hainan had to go through
the Singapore Hainan Hwee Kuan. Hence, I got
to know of their arrivals and had the chance to
handshake with them. As a result, I got to know
them personally. Because of my good relation-
ships [guanxi] with these authorities, some of
them had even appointed my company to pro-
vide information to their units and companies,
Table 4 Mr. Leong’s (of Great Link Investment) Portfolio
4A Mr. Leong’s Memberships and Appointments Held
Singapore
✓ Hainan Society—Chairman
✓ Hainan Society—Foreign Affairs Director
h
✓ Singapore SMEs Association—Trade and
Investment Director
h
✓ Singapore Hainan Hwee Kuan—member
h
✓ SCCCI - member
✓ Previous appointments held
h✓ Current appointment held
4B Mr. Leong’s Political Connections
Singapore
• Arranged Hainan’s official visit to EDB (1992)
• Helped TCS to produce a 15-part documentary
series on Hainan Province (1996)
4C Mr. Leong’s Business Establishments
Singapore
• Method Engineering Pte Ltd
• Great Link Investment
• South Chinese Investment Pte Ltd*
• Tongyong International Trust Pte Ltd*
*Small shareholder of company
such as corporate profiles and other printed mate-
rials. This Company and I were also appointed by
Hainan Province Overseas Chinese Office to be
their official “interaction point” [jiaoliudian]. (In-
terview in Singapore, 30 December 1997)
Because of these spinoff connections from
his participation in Hainan Society, Mr. Leong
established the Great Link Investment Pte Ltd
to provide consultancy services for potential
investors interested in Hainan. Mr. Leong
himself also has several personal investments
and is a shareholder of several Singaporean
firms in Hainan (see Table 4C). His partner-
ships in the listed joint ventures are indirectly
linked to his connections with important polit-
ical figures in Hainan (see next section).
State-Business Relations and Singaporean
Investment Strategies
Having guanxi with political figures is tradi-
tionally perceived as a very advantageous and
powerful means of getting things done in China.
The relatively more successful and faster imple-
mentation of investment ventures by Sin-
gaporean firms in various China-Singapore in-
dustrial parks (compared to those privately led
Hainan
h
✓ Hainan Province Foreign Exchange Society—
Overseas representative
h
✓ Hainan Overseas Chinese News—Advisor
Hainan
• Provincial Head of Hainan Province
• Mayor of Wenchang City
• Various ministers in Agricultural Department,
Trade and Investment Department
Hainan
• Hainan Method Engineering
• Leong’s Farming
• Fu’an International Travel
• Guanqiao Auto Car Washing*
• Lucky Thermal*
• Diamond Travel*
 Regionalization of Chinese Business Networks
investments in Hainan) reflects the influence of
active governmental participation. Similarly,
the success of two prominent businesspersons
(Mr. Han of Arklight Engineering and Mr. Le-
ong of Great Link Investment), who have mul-
tiple investments and property assets, shows
the advantage of having good political connec-
tions when doing business in Hainan. Interest-
ingly, from our survey of Singaporean firms in
Hainan, Singaporean Chinese entrepreneurs
display little connections with their home
country government and are often not aware of
the Singapore government’s active promotion
of regionalization. Instead, these Singaporean
Chinese business people have actively searched
for political alliances in the host country to fa-
cilitate their overseas investments.
Although the regionalization of Singaporean
firms into other provinces of China is essen-
tially a state-guided phenomenon, its material-
ization is highly uneven across all regions in
China. From our research Hainan is clearly not
given as much attention by the Singapore gov-
ernment for several reasons. One reason men-
tioned by our interviewees is the critical re-
marks made by Senior Minister Lee Kuan Yew
during his visit to Hainan in 1993. SM Lee
once expressed his reservations about the eco-
nomic potential of Hainan due to its lack of in-
frastructure, underdeveloped economy, and ir-
relevant industries (relative to Singapore’s
industrial structure). Its leading industries were
tourism and agriculture. SM Lee perceived
that Singaporean enterprises would not be able
to benefit much from there and that one of
Hainan’s key areas of attractions (i.e., agricul-
ture) was not the strength of Singaporean
firms. Hainan’s economic structure therefore
did not attract Singapore’s governmental agen-
cies to promote investments there. There is
thus very little involvement from Singapore’s
governmental or quasi-governmental institu-
tions in Hainan.
Another reason is that government agencies
in Singapore are less interested in supporting
investments that do not belong to high-profile
manufacturing industries or large infrastruc-
ture developments. Most Singaporean ventures
in Hainan are relatively small-scale investments
motivated by social and cultural reasons. Their
level of contribution to Singapore’s high-tech
economy is not as substantial when compared
to other high-profile large-scale investments in
449
China-Singapore industrial parks in Wuxi and
Suzhou (see Cartier 1995; Yeung 1998a, 2000c).
As pointed out by one respondent:
The Economic Development Board [main mar-
keting arm of the Singapore government] only
has an interest at the provincial level. They have
no interest in city, county or low-level projects.
They want to know the provincial head, maybe
the city-mayor. It would be best if he’s from the
central government. (Interview in Singapore, 30
December 1997)
Many owners of small and medium enter-
prises interviewed are also not aware of the Eco-
nomic Development Board’s regionalization
policies because either they do not qualify for
Board’s supporting schemes or they have enough
financial ability on their own to sustain their in-
vestments. Whereas small and medium enter-
prises pooled their investment capital through
partnerships in joint ventures (e.g., Lion City
Condominium, Lion City Resort, Haixin In-
vestment), large corporations had very strong
financial support from their parent firms or ac-
cess to local and regional capital markets (e.g.,
APB, APP, Overseas Union Enterprise). Those
retirees mentioned earlier transferred their per-
sonal savings to Hainan. Their intentions are
mostly for retirement’s sake and not for expan-
sionary reasons. As a result, they do not need
much support from the Singapore government.
Conclusion
To put our study in perspective, an institutional
approach to the study of economic activities
and organizational structures “has provided an
evolving framework of inquiry rather than a set
of tested propositions” (Westney 1993, 75).
Through an empirical inquiry into the motiva-
tions and strategies of Singaporean investment
in Hainan, China, we argue that beyond con-
ventional economic reasons, institutional em-
beddedness provides an important motivation
and mechanism for these Singaporean ventures
abroad. Based on a total of 22 case studies, we
agree with Orrù et al. (1997, 299) that eco-
nomic action is best understood as historically
emerging, socially constructed and patterned
behavior of individuals and groups. Our find-
ings show the significance of social and cultural
influence on Singaporean investment in Hainan.
It is also evident that the investment strategies
and practices of Singaporean Hainanese are
450 Volume 52, Number 3, August 2000
strongly embedded in social and cultural insti-
tutions of Chinese societies.
An understanding of the institutional differ-
ences between the two countries has important
implications for Singaporean businesspersons
as well as state agencies. For instance, one dis-
tinct institutional difference between the two
countries is the strong embeddedness of busi-
ness transactions in their respective institu-
tional contexts. In a Chinese society, it is com-
mon for businesspersons or political figures to
contract businesses through unwritten verbal
agreements based on guanxi and xinyong or
trustworthiness. However, in the Singaporean
context, the governance structure of transac-
tions is based on a set of highly effective legal
codes and bureaucratic procedures. A number
of interviewees responded that one has to fol-
low the Chinese style of working when doing
business in China. Hence, foreign businessper-
sons as well as government officers from Sin-
gapore should take into consideration these
institutional differences in their business nego-
tiating processes in order to ensure more suc-
cessful business ventures in China.
This study also has implications for under-
standing the impact of the recent Asian eco-
nomic crisis on Singaporean firms operating in
the region. As the dominant form of capitalism
in Asian countries, the Chinese business system
is equally affected by the crisis (Yeung 1999c,
2000b). The increasing flow of “overseas Chi-
nese” capital into China has brought great ben-
efits and growth for its economy. The issue
here is whether it is feasible for ethnic Chinese
to take temporary shelter under the rather in-
sulated Chinese capital market. From this study,
lower factor costs (in all industries) in Hainan
seem to offer a good option for tight-belted
Singaporean firms that intend to expand and
stay competitive throughout this regional cri-
sis. As one of the respondents, Mr. Han, noted:
In 1984, the shipping engineering trade was
badly hit by the economic recession then. A lot
of companies closed down. My company was al-
most going to wind up. Since 1984, my US
friends helped me with a large sum of US dol-
lars. They loaned it to me. I calculated the
money. Since Singapore’s economy is bad at that
time, I decided to invest in China in 1984. (In-
terview in Singapore, 14 January 1998)11
China’s large domestic market also offers an al-
ternative outlet for Singaporean firms to stay in
production in the midst of declining demand in
other Asian markets.
At the more conceptual level, the institu-
tional framework in this study identifies and
abstracts the distinctive features of the Chinese
business system in Singapore and China. One
implication is the extent of applicability of this
institutional approach to the study of other
geographical phenomena. The general logic
behind this approach is that social and eco-
nomic action is highly place-dependent and in-
stitutionalized through embeddedness in net-
works of ongoing relationships in society and
space. Different geographical contexts, cultural
and social processes (in this case, investment
flows from Singapore to Hainan) place different
constraints on our everyday social and economic
behavior. In addition, a multidimensional anal-
ysis of both observable and underlying struc-
tures is possible within this framework. An in-
stitutional framework is thus useful in the study
of outward investments from different econo-
mies because it allows an analysis to go beyond
conventional economistic explanations of in-
ternational production (Yeung 1994b). As ex-
emplified so well in Thrift and Olds this insti-
tutional perspective helps us to reconfigure the
“economic” in economic geography by “‘stretch-
ing’ its own definition so as to make itself more
inclusive and more able to mix in company”
(1996, 313).
Notes
1 The idea of bringing Singaporean style and experi-
ence of managing industrial estates to China was
first discussed during a visit by the late senior Chi-
nese leader, Deng Xiaoping, to Singapore in 1978.
After numerous exploratory visits by Singapore’s
top leaders to China, including Senior Minister Lee
Kuan Yew and Prime Minister Goh Chok Tong,
Suzhou in Jiangsu was selected in 1993 as a site for
the transfer of Singapore’s economic development
software (see Yeung 2000c).
2 We used a qualitative personal interview method to
collect information and a case study approach to an-
alyze empirical data (Schoenberger 1991; Yin 1994;
Yeung 1995; Clark 1998a). Our institutional frame-
work requires a multilevel analysis that examines
both macro- and micro-level phenomena. We se-
lected multiple case studies for a comparative analy-
sis of Singaporean investments in Hainan. Each
case was carefully analyzed and those cases showing
similar results or reasons were grouped together to
draw meaningful conclusions. Specifically, all Sin-
gaporean firms having investments in Hainan were
 Regionalization of Chinese Business Networks
selected as potential study subjects. In the prelimi-
nary selection, a list of 23 firms was compiled from
a commercial directory (Singapore-China Trade and
Investment Directory 97/98 1998), various newspaper
articles, the Internet, and personal contacts. After
telephone surveys were conducted to verify the au-
thority of these firms, 17 firms were identified
(along with their relevant person-in-charge). Six
other firms were eliminated because their opera-
tions were no longer in existence in Hainan or they
were unable to be contacted due to inaccurate or
outdated information. Personal interviews were
conducted with top executives from parent firms in
Singapore (and in Hainan if the key executives were
personally managing the operations there). During
the interviews, a tape recorder was used whenever
possible with the permission of the respondents. A
total of 10 transcripts was completed. At the end of
the interview, permission was sought from the in-
terviewees to visit their business sites and to inter-
view their local managers in Hainan by one of the
authors in February 1998. From the initial list of 17
firms, all except three granted personal interviews.
During the interviewing process, three further con-
tacts were recommended and all were granted inter-
views. In total, 16 interviews were conducted. The
remaining sampled firms used in this study were
drawn from information collated through the locals
and personal observations during the Hainan field
trip and other printed materials such as newspapers
and annual reports.
3 A branch of the Bank of China started operation in
Singapore as early as 1936.
4 In 1995, the Singapore dollar’s exchange rate was
S$1.42 to US$1.
5 The lineage consists of a group of males all descend-
ing from one common ancestor, all living together
in one settlement, owning some property in com-
mon, and all nominally under the leadership of the
man most senior in terms of generation and age
(Baker 1979, 49).
6 Multilineage settlements are also commonly found
in southeastern China, where lineage organization
is strongest (Baker 1979, 65).
7
A normal visa for a Singaporean is only valid for six
months. These elders can renew their visa in
Hainan for another three months, but only up to a
maximum of two renewals. Thus, they usually have
to return to Singapore after a year of residence in
Hainan before they can apply again to return to
Hainan.
8 These accounts were gathered from the local Hain-
anese during the field research in Hainan and from
one of the authors’ own relatives in Singapore.
9 Friendship is a synonym for guanxi.
10 It was only random individuals from within a fam-
ily, lineage, village or county that emigrated abroad.
Hence, there were often no families, no lineage, and
no clans in the host countries.
11 Today, Mr. Han’s shipping engineering company in
Singapore is still in business. Due to his early entry
into Hainan, he established a great deal of guanxi or
451
connections. Currently, he owns several properties
and a sack-making factory in Hainan.
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CHIA-ZHI TAN graduated from the National Uni-
versity of Singapore with a B.A. Honors degree (ma-
joring in Geography). His main research interests
cover broadly ethnic Chinese investment in China,
the geography of transnational corporations, and
Geographical Information System. During his re-
search fieldwork in Hainan, China, in 1998, he inves-
tigated the motivations of Singaporean investment
there. E-mail: cityzpper@post1.com.
HENRY WAI-CHUNG YEUNG, Ph.D., is Assis-
tant Professor at the Department of Geography, Na-
tional University of Singapore, 1 Arts Link, Sin-
gapore 117570. E-mail: geoywc@nus.edu.sg. His
research interests cover broadly theories and the ge-
ography of transnational corporations, Asian firms
and their overseas operations, and Chinese business
networks in the Asia-Pacific region. He has con-
ducted extensive research into Hong Kong firms in
Southeast Asia and the regionalization of Sin-
gaporean companies.