Bridges with Asia: Asian Americans in the United States

Bridges with Asia: Asian Americans in the United States:
Economic Engagement with Asia

May 2–4, 1996

Plenary Session introduced by
	Setsuko Matsunaga Nishi, ₁ Professor of Sociology, Brooklyn College and the Graduate School, City University of New York

Moderator
	Gareth C. C. Chang ₂ Corporate Senior Vice President, Hughes Electronics Company and President, Hughes International

Presentations
	2 + 2 = 1/2 Purnendu Chatterjee ₃ Chairman, The Chatterjee Group, New York
	Chinese Americans and the Pacific Regional Economy Lucie Cheng ₄ Professor of Sociology, University of California, Los Angeles, and External Examiner, City University of Hong Kong
	American Engagement in Asian Financial Services Andrew B. Kim ₅ President, Sit/Kim International Investment Associates, Inc., New York
	Economic Engagement: Vietnam Case Study Le Anh Tu Packard ₆ Fellow, Foundation For Indochina Studies and Managing Associate, Vietnam Investment Advisory Service, Philadelphia
	Dragon Lady Lawyers and other Myths about Doing Business in Asia Alice Young ₇ Partner and Chair, Asia–Pacific Practice Group (U.S.), Kaye, Scholer, Fierman, Hays And Handler, New York

Panelists in this discussion covered a wide range of topics as follows:

the effect of the rising Asian economy on Asian Americans,
the effect of Asian Americans on the rising Asian economy,
strategies for investing and working in Asia, and
the pitfalls of doing business in Asia.

Andrew B. Kim provided an example of the beneficial effects that the rising Asian economy had for him. In the mid-1980s when Kim started an Asian investment company on Wall Street, he achieved notable success only when Asia’s economy began to rise. Le Anh Tu Packard argued that the recent growth of the Vietnamese economy has to a large extent been due to the remittances that Vietnamese Americans have sent to their homeland. Kim and Alice Young discussed strategies for economic success in Asia. Kim’s strategies are based on equalizing and stabilizing capital flow in Asia, while Young contends that Asian Americans must use their bicultural background to the utmost advantage while in Asia. In order to do so, they must learn their “native” language fluently, adapt culturally, and exploit their family or other connections whenever possible. Purnendu Chatterjee argued that investing in Asia is not as profitable as he first thought it might be. In fact, he put in twice the effort and twice the capital only to yield half the profit—the 2 + 2 = 1/2 phenomena. Lucie Cheng listed the disdvantages of economic globalization: Polarized class stratification within Asian America has promoted individual interests over those of communities, pigeonholed Asian Americans in the corporate sector into the role of East–West intermediaries (effectively barring them from more powerful positions), and fostered unprecedented international crime rings.

Moderator Gareth Chang wryly noted that the panelists ignored the issues concerning Asia that he challenged them to address: the inconsistency between U.S. foreign policy and free trade, human rights, the glass ceiling, the advantages and contributions of Asian Americans, and the strengths they bring to the business community. Instead they focused upon the effect that Asian Americans have had on economic growth in Asia and vice versa, economic strategies for Asian investment, and the dangers of investing in Asia.

Asian Americans have had a major role in the rise of Asian economies, which in turn has affected them significantly. Andrew Kim and Le Anh Tu Packard provided several illustrations of this point. Kim provided a personal example. Before the mid-1980s, he operated a company on Wall Street without significant success. But when the Asian economies began to grow, Robert Flemming, currently the largest merchant banker in Asia, purchased Kim’s company and promptly conquered China.

Packard provided several illustrations of the impact Asian Americans wield on economic growth in Asia.

The recent economic boom in Vietnam, while having reached only a fraction of its potential, has resulted mostly from Asian American investment. Many overseas Vietnamese who have returned have generated such great amounts of revenue that, in an unprecedented effort, the Vietnamese government is attempting to harness the resources of this group. Overseas Vietnamese, in addition, have made many undocumented contributions, most of which have come in the form of remittances to family. The remittances, to a large extent, have gone toward small businesses, which Packard feels could fuel dynamic economic growth in Vietnam.

Panelists also discussed strategies for economic success in Asia. Kim provided specific investment plans, while Alice Young pointed out tactics that might help eradicate many of the difficulties she has experienced as a woman, a lawyer, and an Asian American.

While commenting on how Asia’s economic rise can positively affect the fortunes of Asian Americans, Kim also noted that Asia has benefited from the West, especially from Western-based service corporations. Asian American graduates can make significant contributions to these companies. Kim recently advised a large pension company to make a number of substantial investments in Asia. This not only benefited the company, large amounts of capital helped the Asian economy. Novel investment strategies like Kim’s have helped the U.S. corporate sector recover much of the market that Japan once controlled while still boosting economies in Asia. Investment-consultation businesses are clearly on the rise and a good way for Asian Americans to penetrate the Asian market, which is profitable for both the U.S. investors and Asia’s economy.

Since capital is centered on the Japanese market, Kim feels that Asian Americans must help to distribute, equalize, and stabilize capital flow. Asian Americans, amid all this economic growth and movement, have a chance to redirect this toward other Asian nations. While diversifying corporate investment, Asian Americans ultimately can help to build diversified economies in Asia that will sustain steady economic growth.

Alice Young, while also providing tactics for successful entry into the Asian economic arenas, came from a much different perspective than Kim. Young gave advice on how to succeed as an American-born Asian female lawyer.

Stereotypes such as “passive behavior,” “foreignness,” and “indistinguishability” hinder Asian Americans. They can combine their knowledge of Western strategy with their Eastern cultural background when trying to forge East–West business connections.

Barriers to Asian American participation also exist in Asian societies. For people like Young, gender is the greatest professional obstacle she faces in Asia. She was shocked by the lack of female professionals in China, but finds that today conditions are much different than those of the past. While Asian women once had to be the “dragon lady,”—tougher and smarter than everyone else, they no longer have to play that role to succeed.

Young also has had to overcome her identity as an American-born Asian. She recommends that to overcome these barriers Asian Americans have to fully adapt to their situation. They must learn the language. While Asians praise whites who speak the language poorly, they dismiss Asian Americans who do not speak the language perfectly. Age and experience have also helped Young gain insight into the cultural mores of many Asian nations. She recommends going with the flow and not losing one’s identity.

Asian Americans should take advantage of any networking opportunities such as family connections. They should exploit the perceived connections between themselves and their fellow Asians as well. Finally, they must understand their function in U.S.–Asia economics. They are bridges, links, and compromisers instead of door openers and financiers.

Kim, Young, and Packard each dealt with the optimistic aspect of U.S.–Asia business relations. But Purnendu Chatterjee and Lucie Cheng pointed out several difficulties related to business involvement in Asia as well as its detrimental effects. Chatterjee has labeled Asian investment a 2 + 2 = 1/2 strategy. Having found investing in Asia to be much more difficult than it may seem, he eventually adapted to Asia’s market characteristics but not without redirecting many of his initial, more idealistic goals.

Originally, Chatterjee felt that investing in his country of origin, India, could provide lucrative returns. After all, his cultural background gave him a competitive advantage. He also wanted to bring something back to India and spend more time with his mother. Without any experience, he decided to “jump in” and invest in long-term infrastructure projects which were answering local needs. But he soon found that these investments tied up his funds twice as long, cost twice as much, and yielded only half the return. Of course, there were many reasons for this, but Chatterjee felt that the major problem was Indian people’s working methods. Teamwork was often hampered by traditions such as deference to elders who may not be as skilled. Many investment opportunities still exist, however. Chatterjee, for instance, now prefers cheap, short-term investments. In the end, however, the emotional gain outweighed the physical strain. By rationalizing his losses, he made his efforts worthwhile.

Cheng, like Chatterjee, pointed out the pitfalls of U.S. investment in China, both for Chinese and Chinese Americans. Asia’s escalating economic influence has had a significant effect on Chinese Americans. The influx of Chinese immigrants into the United States since 1965 and the various forms of capital that have followed them have fundamentally changed the identity of Chinese America. New intra- and interethnic relations have emerged. There is now the exploiter and the exploited, the racist and the victim, as well as many other dualities. Identity is no longer fixed. Whereas Chinese Americans once stood firm against racial oppression, they are now confused. Many of their friends denounce them while their enemies embrace them.

This flux, Cheng maintained, is fueled by the changing global economy. The economic rise of China, Taiwan, Hong Kong, and Singapore and the relative decline of the United States have changed its relationship with Asia. Capital is now seeking cheap Chinese labor in both China and among Chinese Americans. A myriad of businesses have also been formed to exploit this new relationship and form the networks to facilitate transnational capital. These networks have broken the glass ceiling for many Chinese Americans.

This globalization of capital has also rendered obsolete such phenomena as brain drain which has been replaced by a new negative trend.

Governments can no longer prevent the highly educated Western professional from migrating, even if such movement is detrimental to the state. If their movement is regulated, such acts are denounced as “violations of human rights.” This marks a clear victory of individual interests over community and even human interests.

This global economy has also left many segments of the Chinese American population out of the loop. Not all Chinese Americans are poised to take advantages of the changes. Some cannot speak any of the Chinese languages or are not familiar with Chinese cultural traditions. These differences further reinforce the split that has already begun in Chinese America. And those who are incapable of taking advantage of the global economy, those who have worked hard to create local identities outside of “Chineseness” are being engulfed by the rise of the Pacific Rim as well as the shifting brought about by it. Ironically, while many of these Chinese Americans refuse to submit to the influence of the Pacific Rim, white Americans and nonethnic Chinese are actively preparing themselves to take advantage of the burgeoning Pacific era.

For those transnational professionals who have taken advantage of the new global economy, life is better than ever. Even though Chinese Americans have always been transnational, the mutually beneficial result of transnationalism is a recent development.

While class divisions are widened as a result of limited participation in the global economy, racial difference and racial oppression have not faded or been made any less significant. Companies are beginning to pigeonhole Chinese Americans into positions in which they work only with the Chinese economy. Chinese Americans are being shut out of the mainstream economy because the corporate sector feels that they are competent to deal only with the Chinese. On the other hand, Chinese also discriminate against Chinese Americans because of their minority status. Chinese often prefer not to work with Chinese Americans because they feel that their American counterparts cannot bring the right elements to a business transaction.

Economic globalization has resulted not only in transnational capitalism but also in transnational crime. Carjacking, kidnapping, and extortion rings have proliferated. One syndicate, for instance, may steal a car in the United States and then ship it to China to be sold. Chinese, like any other group, have harnessed multiple ways to exploit this recent economic development.

Cheng warned, in the end, that as global capitalism progresses, it creates opportunity for some and disaster for others. Participating societies are increasingly polarized into the super rich and the devastatingly poor. China is a prime example. How large a gap is acceptable? At what point will people decide to halt this trend? While capital is spawning networks, other groups are aligning against its effects by making their networks. Nongovernmental organizations and labor unions are creating even more bridges across the Pacific, so that in a few years when business executives are looking for cheap Chinese labor, they may be in for a surprise. Transnational Chinese Americans are not only advancing global capitalism, they are working to resist its expansion. Cheng posed the challenge to Asian Americans to decide which bridges they want to build.

The panelists provided a sobering view of what a fully developed global economy might engender. While Chang, Kim, Packard, and Young constructed optimistic visions of the future, especially in regard to Asian Americans, Chatterjee and Cheng painted pictures that inspire caution, if not fear, of this burgeoning world. As Chang mentioned in his introduction, Asian Americans certainly have a great deal to consider before they embark headfirst into the creation of the global village.

Discussion

This question and answer segment was one of the liveliest in the conference. One audience member enumerated the responsibilities of Asian Americans pursuing the goal of increased trade with Asia. Chang contended that the United States cannot keep up with the changes in China. Asian Americans must develop an approach to trade and foreign policy that is good for the United States first and for global citizens second. Young stressed that in addition to trading with Asians, Asian Americans must also try to educate them through involvment in foreign policy. Finally, Cheng stated that what one brings to Asia really depends on one’s self-interests and goals. Asian Americans must think in terms of U.S. national goals. For Cheng, her personal goal is to help develop a self-reliant China.

On another note, panelists addressed the extent to which entrepreneurs can influence homeland policymakers to make investment more attractive. Chatterjee asserted that he had already tried to influence Indian policymakers on the “cocktail circuit” to no avail. Too many conflicts between capital and the Indian populace stand in the way. Packard insisted that investors have an obligation to assist homeland policymakers in understanding macroeconomics.

Turning toward a different direction, Kim and Chatterjee addressed the risks of investing capital in Asian markets. Kim feels that these risks lay primarily in currency exposure, the stability of national and economic conditions, and managerial expertise. To be successful, managers must know the track records of local management companies as few firms maintain documentation. Such risks, however, are compensated by the potential for higher return. To keep capital within a particular country, one can threaten to withdraw investments to persuade Asian policymakers to render more profitable local business conditions. Chatterjee, deviating significantly from Kim, maintained that risks result from an excess of capital chasing a paucity of opportunities.

Endnotes

Note 1: Setsuko Matsunaga Nishi is Professor of Sociology at Brooklyn College and the Graduate School of the City University of New York. She was the founding president of the Asian American Federation of New York (1990-95) and is Chair of the New York State Advisory Committee to the US Commission on Civil Rights. Her long research career has produced numerous monographs and several books and has focused primarily on American race relations, including the adaptation of Japanese Americans following their wartime incarceration and the historical and contemporary attitudes toward Asian immigrants. As a social scientific specialist on race relations and US minorities, Dr. Nishi has contributed to the development of social policies and programs for many public agencies and private organizations. She received her Ph.D. in Sociology from the University of Chicago and an M.A. in Sociology from Washington University (St. Louis). Back.

Note 2: Gareth C. C. Chang is Corporate Senior Vice President of Hughes Electronics Company and President of Hughes International, where he is responsible for worldwide operations and the corporate business development function. Before coming to Hughes, Mr. Chang had a long career with the McDonnell Douglas Corporation, serving as President of McDonnell Douglas Pacific and Asia, and Chairman of the Joint McDonnell Douglas-Shanghai Aviation Executive Board. Mr. Chang has served as Chairman of the American Chamber of Commerce in Hong Kong and is currently serving on the boards of Atlantic Council, Pacific Forum CSIS and Johns Hopkins-Nanjing Center. He is also a professor (honorary) at the Beijing Institute of Aeronautics and Astronautics. Back.

Note 3: Purnendu Chatterjee is the founder and Managing Director of The Chatterjee Group, an investment consulting company where he manages a substantial part of the technology-based industrial investments presently held by the $12 billion Quantum Group of Funds. His background includes both technology research and classical management consulting, and he has directed major strategy and organization assignments to maximize shareholder value for chief executive officers of large industrial companies in the US, Europe and Asia. Back.

Note 4: Lucie Cheng is Professor of Sociology at the University of California, Los Angeles. She writes in the fields of international migration, gender, ethnic relations, and development. She served as the director of the Asian American Studies Center at the University of California, Los Angeles, for more than 10 years and is the founding director of the Center for Pacific Rim Studies. Professor Cheng was elected to be Chair of the Asia and Asian American section of the American Sociological Association and serves as an officer in many other professional and civic organizations. Recently appointed as an external examiner of City University of Hong Kong, she is also a frequent visiting professor at the Nankai University in China and the National Taiwan University. Back.

Note 5: Andrew Byoungsoo Kim is President and Chief Investment Officer of Sit/Kim International Investment Associates, Inc., where he manages listed international securities portfolios and private equity investment in Asia. Kim’s career spans more then 30 years in finance and investment management in the US and Asia. An active participant in many industry associations, including the Association for Investment Management and Research and the Society of International Security Analysts, he is also a member of the Council on Foreign Relations and a trustee of the Asia Society. Back.

Note 6: Le Anh Tu Packard is a Fellow of the Foundation for Indochina Studies, a non-governmental organization established in affiliation with the University of Amsterdam Faculty of Economics and Econometrics to promote economics research, education and training in the Indochina region. She is also Managing Associate of the Vietnam Investment Advisory Service, a private consulting service which provides a broad range of services to firms with business activities in Vietnam. In the course of her 15-year career in economic consulting, she has studied a range of social, economic and institution-building issues confronting Asian economies in transition. Recent publications include “Vietnam Country Risk Analysis: Methodology and Country-Specific Issues,” Vietnam Business Journal, 1995 and “Emerging Issues for the Transition Economies in Asia,” Indochina Interchange, 1995. Ms. Packard received her M.A. and M.Phil degrees from Columbia University in New York. Back.

Note 7: Alice Young, Partner and Chair of the Asia Pacific Practice Group (US) of the legal firm of Kaye, Scholer, Fierman, Hays & Handler, concentrates her practice in corporate law and international business, advising foreign businesses on operations in the US as well as advising US companies and entrepreneurs on their investment activities throughout Asia. Named by Crain’s as one of the “Outstanding Achievers Under 40,” Ms. Young is also a trustee of the Aspen Institute, Secretary of the Japan Society and a member of the board of directors of the Committee of 100. Ms. Young was a special guest of the White House to the Asia Pacific Economic Cooperation (APEC) Forum in Jakarta in 1994. Back.