The main argument of this article is that the middlemen paradigm which since the Second World War has come to dominate academic writings and popular perceptions of Chinese business in late colonial Indonesia is generally flawed, and has hindered the development of a more nuanced picture of the nature of Chinese economic activity in pre-war Southeast Asia.

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The formation of the pribumi business elite in Indonesia, 1930s-1940s Introduction 1 On 19 May 1928, the Japanese-language newspaper published in Batavia, Java Nippo, annoyed by the anti-Japanese boycotts of Chinese traders, called for the elimination of Chinese intermediate trade in the Indies Archipelago and suggested that Japanese companies should contact European, indigenous, and Arab merchant houses. The newspaper stated that, were the Japanese to take natives as their business partners, this would indubitably stimulate indigenous commercial interest, which would benefit the progress of native society. 2This call for closer Japanese-indigenous business cooperation came at a time when Japan had emerged as the engine of the modern Asian economy (Sugihara 1990). Since the 1880s the industrial heart of the country, the Kobe-Osaka area, had developed into a dynamic, new industrial centre for Asia, redirecting existing trade patterns and commodity flows, and attracting Chinese, Arab, Indian, and local indigenous business groups in the region (Post 1993b).Recently Man Hou Lin (1993) has shown how Taiwanese merchants, who had hardly any experience in direct foreign trade prior to 1895, were able to play an important economic role in Fukien (South China) during the Japanese colonial period in Taiwan. She thereby revised the convential wisdom that the Japanese colonization of Taiwan suppressed indigenous enterprise and that the Japanese Government-General and the zaibatsu monopolized the foreign trade of the colony. The rise of the Korean chaebol, too, was closely related to Japanese economic policy in that country. Human resource development was an important aspect of Japanese policies in Korea and indigenous entrepreneurs were given extensive training in Japanese companies and then enabled to start large 1 The research for this paper was made possible by a fellowship from the Koninklijke Nederlandse Akademie van Wetenschappen. I would also like to thank the Masayoshi Ohira Memorial Foundation for their generous support, which made possible a lengthy stay in Japan in 1992, during which I was able to share my views with Japanese colleagues. Moreover, I would like to thank the Lembaga Ilmu Pengetahuan Indonesia for its willingness to grant me a research permit for the period October 1995-July 1996, during which time I was able to conduct in-depth interviews with relatives and business partners of most of the pribumi entrepreneurs dealt with in this paper.

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This paper discusses the paramount role of the Oei Tiong Ham Concern (OTHC) of Semarang in the “Buy Chinese Products” movement of the Republican Government during the period 1928–1937 and its attempts to control Java’s sugar trade with China during the same period. In doing so, the paper focuses on the personal relations between Chen Kung-po (Chen Gongbo), the Republican Minister of Trade and Industry, and the OTHC leadership, as well as the close collaboration between the Dutch-educated Peranakan and Totok Chinese business elites of Java in intensifying economic relations between China and Java. The paper thereby reassesses long-held views about attitudes and economic roles of the Westernized Peranakan Chinese elites and questions the usefulness of simplified political frameworks in analyzing the complex dynamics of intra-Asian trade and commerce in the highly politicized business environment of the 1930s.