With hindsight, we can see that the opening of China to foreign investment was a crucial moment in the evolution of the Chinese diaspora as a major force in the international political economy. The importance for them of the opportunities resulting from economic reform in China were in providing profitable outlets for surplus capital, the means of industrial restructuring and the basis of exponential growth of their industrial capacity. On the Chinese side, we can now see that the Chinese diaspora have been one of the critical factors turning the southeast into the new powerhouse of China’s economy1 and the leader in export orientation and economic reform since 1985.2

Chinese diaspora enterprise is also one of the most important factors keeping the economic reform process in China going. This process, as it emanates from Beijing, is increasingly facing seemingly insurmountable difficulties. These are manifested in the mounting crisis in the finances of state industry, the obstacles to labor reform in the state sector for fear of creating mass urban unemployment, the difficulties of proceeding with price reform for fear of bankrupting state enterprises and undermining peasant incomes, the crisis in the banking system created by political directives to continue providing credit to state industries that have no possibility of repaying, and the danger of recurring inflationary pressures (SCMP, 7/12/1994: 11; SMP, 7/3/1994: M4).