Chinese Business and Ethnic Equilibrium in Malaysia

The economic success of the Chinese in Southeast Asia has often led to tense relations between them and the politically‐dominant ethnic groups. This article examines the changing nature of the Chinese business community in Malaysia over three decades, and suggests a way to understand conflict and co‐operation among the Chinese and Malays over the economy. The analysis bridges the gap between two contrasting views on the future of Chinese businesses: one which sees the state as using the Chinese for their present skills on the way to reducing their economic strength, and another that sees the rise of China and the consolidation of Chinese overseas networks as giving added leverage to Chinese capital over the state. This article argues that a simple Chinese versus Malay view of ethnic conflict is no longer useful, and suggests that approaches to ethnic conflict should take into account the interplay of two key variables—the internal organization of the Chinese business community and the class structure of indigenous society. Changes have occurred in both, resulting in reduced levels of ethnic scapegoating and broader political support for higher‐growth strategies over narrow ethnic redistributive issues.