Chinese entrepreneurship in a globalized world: place, space, and mobilities

Diasporic Chinese entrepreneurship is a longstanding phenomenon for scholarly research (Zhou 2021). While the study of overseas Chinese entrepreneurs is an important subject matter in itself, much of the social science literature has taken on the perspectives of migrant-receiving countries and drawn on the diverse adaptation or integration experiences of Chinese migrants and their descendants to develop concepts such as ethnic enclaves, social capital, embeddedness, bounded solidary, and enforceable trust (Portes and Zhou 1992; You and Zhou 2019). Although historically, entrepreneurship has been a vital aspect of diasporic Chinese life and is crucial for understanding Chinese migration, immigrant transnationalism, and ancestral homeland or hometown development, scholars have increasingly shifted their focus to consider a rising China as the context from which contemporary Chinese entrepreneurship is developed and globalized.

In Mainland China, nation-wide economic reforms enacted since the late 1970s have given rise to a burgeoning entrepreneurial sector, in which participants consist of not only Chinese citizens, but also diasporic Chinese, including internationally educated students, migrant returnees and transnationals (Saxenian 2002; Wang, Zweig, and Lin 2011), as well as international migrants who have arrived in China to pursue economic opportunities with or without initial intention to be entrepreneurs (Lyons, Brown, and Li 2012). While many scholars of Chinese entrepreneurship have written on the relations between diasporic Chinese entrepreneurs and their ancestral homeland from historical and cultural perspectives, few have attempted to examine China as the “host” context for diverse entrepreneurial undertakings. How unique is China for entrepreneurship? What does China mean as a place for individuals to launch their entrepreneurial pursuits? In this special issue, we address these questions through four studies of entrepreneurship by Chinese mainlanders, diasporic Chinese, and international migrants in China. We challenge the widely held cultural explanation of Chinese entrepreneurship and highlight the significance of China as a host context in which place and space intersect through the movement of international and internal migrants in affecting entrepreneurship. This editorial first provides a brief overview of the four contributions to this special issue, followed by some thoughts to move this line of research forward.

Overview of the special issue

The study by Biyang Sun and Eric Fong is among the first to quantitatively document and analyze how human capital, residential location, time since migration, ethnicity, gender, and culture influence immigrant entrepreneurship in Hong Kong. The recent growth of immigrant entrepreneurial activities in Hong Kong reflects the city’s underlying dynamics conducive for foreign investments that have been impacted by its strategic location and China’s economic development. Using pooled Hong Kong census data from 2001 to 2016, Sun and Fong compared the probabilities of attaining entrepreneurship among immigrants of different demographic and socioeconomic characteristics and their interactive effects. Their findings were generally in line with the cultural, human capital, and intersectionality theories, indicating that the length of stay in the destination, levels of educational attainment, proficiency in the local language, and similar cultural background were all positively associated with the likelihood of becoming entrepreneurs. The findings also pointed to the gender differences in entrepreneurial probability both at time of arrival and in the long run. That is, women were initially disadvantaged in entrepreneurship compared to men and that the gender gap further widened as these women entrepreneurs stayed in Hong Kong longer. However, the authors did not observe an obvious association between co-ethnic density and entrepreneurial probability, implying a lack of support for the embeddedness theory in the case of Hong Kong. This finding is intriguing and suggests a possible interaction effect between ethnicity and contexts of migrant reception. Although Hong Kong has long been a global city and a major center of trade and commerce in Asia attracting migrants from China and elsewhere around the world, the city’s packed housing and accessible and well-integrated public transportation networks led to residential dispersion among migrants of diverse socioeconomic and cultural backgrounds, which deterred ethnic community formation. In a sense, immigrant entrepreneurs may not be embedded in their ethnic communities and may not have the kind of embedded social capital for their entrepreneurial pursuit as those in conventional migrant-receiving cities in the West.

Existing studies on entrepreneurial performance in China often emphasize the prevalence of those considered to be hai gui (student or migrant returnee), particularly the importance of the experience of studying abroad. Among the founders of high-performing companies in China, the proportion of hai gui, especially those who have attained their advanced degrees in universities in the United States, is significant. Yet, the emerging research suggests that more and more founders of high-performing companies are China-educated, such as Jack Ma, the founder of the Chinese e-commerce giant Alibaba Group. The study by Robyn Klingler-Vidra, Ye Liu, Steven Jiawei Hai, and Adam Chalmers aims to assess the transnational and place-based hypotheses on entrepreneurship, i.e., the extent to which successful entrepreneurs draw on their international education experience, or stayed in their home cities in China to attend schools and later found their companies in the same cities, as Ma did with Alibaba in Hangzhou. Klingler-Vidra and her colleagues traced the spatial mobility patterns, in terms of where they completed their college degrees and where they established their companies afterwards, of 75 founders of the Chinese companies that had raised at least US$1 billion in private equity funding as of March 2020. They found that, like Jack Ma, this elite cohort of entrepreneurs was predominantly graduates of universities in urban coastal regions in China, especially at the bachelor’s level, and that more than 97% of this cohort migrated within or to China’s coastal region. While confirming the role of social and human capital for entrepreneurship, the study highlights the significant effect of place, showing that sub-national migration within China—to and within coastal urban areas—is a more powerful driver for entrepreneurial success than transnational migration.

Jinpu Wang’s study of the Chinese wig business in Africa illustrates how entrepreneurship traverses space and family relations. While much research has been done on the role of large manufacturing firms in making China the “world factory,” relatively little attention has been paid to the role of the middlemen who are made up of a myriad of Chinese entrepreneurs scattered throughout different parts of the world. These “transnational middlemen” are intermediaries trading low-cost commodities manufactured in China in international markets. Based on multi-sited ethnographic fieldwork, Wang offers a glimpse into the backstage from which migrant entrepreneurs conduct business across national boundaries. Zooming in on the role of gender and the family through women’s status as a fluid combination of unpaid family labor, underpaid factory wage labor, and entrepreneurs in production and value creation of the wig business, Wang showed how locally-based households and factories in Xuchang, China, and wig business owners in Ghana were interconnected, and how women were integrated into increasingly globalized value chains to “capture the gains” of their labor. While uncovering this important but under-researched aspect of transnational entrepreneurship, Wang touches upon a number of sociologically significant issues that are not usually attended to in the entrepreneurship literature, for example, how economic upgrading by entrepreneurs and the penetration of global capitalism in locally-based production reconfigures familial relations and values of work in rural China where the wig industry originated and became globalized.

Zhenxiang Chen and Xiaoguang Fan’s paper focuses on international migrant entrepreneurship in China. International migration to China is a relatively recent phenomenon. Traders and merchants from Africa and the Middle East have been highly visible in Guangzhou and Yiwu, two of the best-known international trading cities in China (Zhou, Xu, and Shenasi 2016). While recent studies of the international migrant entrepreneurs were mostly qualitative cases studies based on Guangzhou and Yiwu, Chen and Fan used a subsample of Hangzhou from a unique dataset, the 2018–2019 Survey of Foreigner Residents in China (SFRC), to quantitatively examine what determines immigrant entrepreneurs. The authors developed a transnational model that took into account how both host factors, measured by social networks and language skills, and home factors, measured by migrants’ capital assets, hometown size, and average income and culture of the home country. The authors found that, while host factors were significant determinants for migrant entrepreneurship, these effects were not straightforward. For example, networks with compatriots mattered more than networks with immigrants from different countries of origin, but networks with local Chinese had no significant effect. In contrast, Chinese proficiency increased the likelihood of becoming an entrepreneur while English proficiency decreased that likelihood. This is an interesting finding, suggesting that Chinese is a more important determinant than English for entrepreneurship in China. Regarding home factors, the authors found that having more capital assets and originating from countries of greater income gaps and greater cultural similarities were positively associated with greater likelihood of becoming entrepreneurs in China, but that the effect of hometown size was insignificant. In terms of interaction effects between host and home factors, the authors only found the interaction between language (both Chinese and English) skills and average income level of the home country to be significant. Given the sheer size of the Chinese market and the China’s unique sociocultural context of reception, this study offers a rare opportunity to verify the applicability of existing theories to research on China.

Place, space, and mobilities

Collectively, the contributions to this special issue support the idea that entrepreneurship is a place-based and place-embedded phenomenon (Lang, Fink, and Kibler 2014). Exactly what does China mean as a place or spatial context for Chinese entrepreneurship? On the surface, a place may be viewed as an important source of economic resources. A main reason for the exceptional success of Chinese and diasporic Chinese entrepreneurs is China’s economic strengths as both an international manufacturing hub and a vast market. As the study by Klingler-Vidra and associates demonstrates, familiarity with local Chinese contexts among Chinese entrepreneurs is more decisive than the overseas experience of transnational Chinese or returnees in business success. Place-based resources, such as concentrated human capital and social capital, help local Chinese gain the upper hand in entrepreneurship. This is evident in the case of international migrant entrepreneurs in China as well. As Chen and Fan’s study shows that proficiency in Chinese, rather than English, is conducive to the pursuit of international migrants’ entrepreneurial ambitions in China. However, place is intertwined with human experiences and activities across space. Entrepreneurial activities in one place can be affected by factors that transcend space on a global scale as shown in the studies included in this special issue. In particular, Wang’s study reveals in rich detail how the Chinese wig business in Ghana is intricately interconnected with migrant’s hometown where the backstage of wig production is located and operated.

At a deeper level, China is more than a place for production and marketing, but offers an institutional arena that defines what works or does not work for entrepreneurial actions. According to Fong and Sun, local language capability, cultural similarity, and residential tenure are important for immigrant entrepreneurs to succeed in Hong Kong. In other words, even in an “global city” such as Hong Kong, immigrant entrepreneurs need to immerse themselves in the “place” whereas forming and embedding in their own co-ethnic community is no longer feasible or necessary. In order to succeed in China, entrepreneurs, whether native or foreign, must closely monitor government rules and regulations and comply with them. They must also respect local norms, beliefs, and customs, which, in spite of being less visible than regulatory institutions, are no less important in shaping entrepreneurial behaviors and outcomes.

Finally, existing research has firmly established the role of China as a unique source of socio-cultural resources for entrepreneurship, and such a role seems more apparent when considering the Chinese entrepreneurs on the move than those who have not left the country. We have seen how Chinese ethnicity and culture outside of China help develop a resilient enclave economy in diasporic communities, like Chinatowns, in developed Western countries (Zhou 1992) and how hometown-based associations in Southeast Asia, the hub of the Chinese diaspora, connect the otherwise dislocated Chinese to reorganize their new lives within diasporic communities, which enables them to then re-connect to other Chinese people for better opportunities (Liu 1998; Zhou and Liu 2015). In such cases, China may serve more as a source of spiritual and emotional support than as a source of tangible support, especially in restrictive institutional environments (Zhou and Liu 2015). Nonetheless, the homeland that diaspora Chinese have left behind continues to supply them with bond entrepreneurial drive and wisdom, which make Chinese diaspora entrepreneurs, or huashang (华商), and are often credited for their disproportionally greater presence in the ethnic economy (Light 1972; Wang 1991; Zhou 2017).

In any case, this special issue is a rare attempt to bring together a group of scholars who were not trained in the professional fields of entrepreneurship studies but are social scientists interested in issues concerning entrepreneurship. Each paper has a social science focus that differs from the existing literature in entrepreneurship studies. For example, in Wang’s study of the Chinese wig business across China and Africa, the “dependent variable” is not observed by the ordinary measures of economic performance. Rather, what is being explained is a sociocultural process through which transnational entrepreneurship occurs and social relations linking migrant entrepreneurs’ hometown in rural China and diasporic community are transformed. Scholars of entrepreneurship studies would benefit from this sociological perspective, as it is increasingly important to look beyond the “bottom line” or “front stage” of entrepreneurial ventures and family businesses. They would also benefit the methodological approaches developed in social sciences disciplines, as revealed in engaged participant observations and in-depth interviews in qualitative field research in anthropology and sociology. Overall, we are reminded that immigrant entrepreneurship as a significant area of intellectual inquiry first emerged in sociology and has remained indebted to sociology and related social sciences (e.g., anthropology) for conceptualization and theory building (Light 2004). However, the reader should take notice that all the contributors to this special issue have made effort to integrate the entrepreneurship studies literature in developing their theoretical frameworks. Their novel insights demonstrate the benefits of interdisciplinary communication and cross-fertilization of ideas.

Xiaohua Lin Ted Rogers School of Management, Ryerson University, Toronto, Canada [email protected] Min Zhou Department of Sociology, University of California, Los Angeles, CA, USA© 2021 Journal of the Canadian Council for Small Business and Entrepreneurship/Conseil Canadien de la PME et de l’entrepreneuriat

Acknowledgements

The papers included in this special issue were previously presented at the International Symposium on Global Chinese Entrepreneurship, hosted by the University of California, Los Angeles (UCLA) Asia Pacific Center (APC), cosponsored by UCLA Anderson School Center for Global Management, and the University of Hong Kong Contemporary China Research Cluster, and funded by a Taiwan Studies grant from the Taiwan Ministry of Education. As co-editors for this special issue, we are grateful for the support of the symposium’s cosponsors and funder as well as staff members of the UCLA APC. We also thank all symposium participants for engaging in intellectually stimulating discussions and offering critical comments, as well as JSBE’s anonymous reviewers for their constructive critiques and thoughtful comments and suggestions. We appreciate the seamless collaboration of our contributors who were extremely responsive and worked hard in revising their papers in a timely manner. We also thank Thomas Newhall whose meticulous copy-editing and insightful queries and suggestions greatly enhanced the clarity and readability of the papers.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Xiaohua Lin

Xiaohua Lin, PhD, is Professor of International Business & Entrepreneurship and Director of the Canada-China Institute for Business & Development at the Ryerson University, Canada.

Min Zhou

Min Zhou, PhD, is Distinguished Professor of Sociology and Asian American Studies, Walter and Shirley Wang Endowed Chair in US-China Relations and Communications, and Director of Asia Pacific Center at the University of California, Los Angeles (UCLA), USA.