The ‘reverse bamboo network’: Sociocultural dialectics of China’s FDI in housing (FDIH) in Iskandar Malaysia

Abstract

The ‘bamboo network’ is used to conceptualise the investment flow into China from the Chinese diaspora, particularly those who resided in South-east Asia. However, global economic events have decimated the wealth of overseas Chinese whilst mainland Chinese businesses prospered, resulting in what is now reimagined as the ‘reverse bamboo network’. In Iskandar Malaysia (IM), which is a transnational economic region bordering Singapore, the foreign direct investment in housing (FDIH) from China has surpassed that of IM’s more prosperous neighbour Singapore, yet the interscalar interactions between market and actors in FDIH have yet to be unpacked. The aim of this paper is to examine how mainland Chinese developers operate within a bamboo network country by arguing that the similar socioculture helps in moderating institutionalised barriers, such as the unfamiliar legal framework and local personnel management. Framed by the ‘reverse bamboo network’ argument and underpinned by the sociocultural explanation, this paper explains the spatial and business transformations caused by FDIH from China. Data and information from desk research and fieldwork are used to construct macro-, meso- and micro-level dialectics in the paper. Ultimately, this paper argues that the sociocultural dialectic provides a complementary explanation of transnational shapers of the urban space in IM, and having political and cultural allies in the host country could tremendously improve business operations of international developers.

The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks

“…As discussed, many members of the Chinese diaspora act as global real estate intermediaries, leveraging their bilingual abilities and understanding of cross-cultural contexts to disseminate information and facilitate capital flows across networks (Ley, 2017; Wong, 2017a). The overseas Chinese community can thus serve as an important investment mediator (Hamzah, 2019; Karreman et al, 2017) and source of capital, too. Thus, the relationship between overseas Chinese communities and Chinese real estate developers cannot be ignored in Mainland Chinese FDIRE, especially when led by PEs.…”

“…Co-ethnic ties can serve as mediating tools for investors to help reduce their business risks and decrease transaction costs, as well as to overcome cultural and linguistic barriers in order to more efficiently obtain place-specific information (Filatotchev et al, 2011; Gao et al, 2013; Ho, 2020; King, 2012). These mediators also help lower other institutionalized barriers such as unfamiliar legal frameworks and issues managing local employees (Hamzah, 2019; Smart and Hsu, 2004). Consequently, ethnic Chinese networks promote flows of Chinese property capital, which in turn facilitates the mobility and wealth accumulation of overseas Chinese communities.…”

“…Limited empirical work has discerned the multifaced and sophisticated nature of mainland Chinese capital in overseas real estate markets. In addition, while recent research into real estate investment acknowledges the socio-cultural dimensions of Chinese FDIRE, most studies are qualitative, focusing on description or detailed case studies at the micro-level (Hamzah, 2019; Liu and Gurran, 2017). Scant research has quantified social and cultural factors in order to statistically demonstrate and substantiate the hypothesized effects of ethnic networks on Chinese FDIRE.…”

The rise of Chinese foreign direct investment in the United States: Disentangling investment strategies of state‐owned and private enterprises

“…Within Chinese society, interpersonal networks and reciprocity, or a form of social ties known as guanxi, play an important role that extends to the business world (Hsu & Saxenian, 2000;Liang et al, 2019). Several studies explore how overseas Chinese communities facilitate China's outbound investments through guanxi social networks (Hamzah, 2020;Javorcik et al, 2011;Karreman et al, 2017). Overseas Chinese communities can assist Chinese MNEs in reducing their business risks and decreasing transaction costs, as well as helping them more efficiently obtain place-specific information (Filatotchev et al, 2011;Gao et al, 2013;King, 2012).…”

“…Recent research within relational economic geography, however, has demonstrated that factors within host countries such as the presence of overseas Chinese communities are also important in facilitating OFDI. Ethnicity‐based networks act as nodes of knowledge and information exchange, assisting Chinese MNCs to reduce communication barriers and obtain local knowledge (Deng et al., 2020; Hamzah, 2020; Karreman et al., 2017; Liang et al., 2019). Their presence, especially in new overseas markets, may be particularly important to helping PEs and smaller SOEs gain footholds.…”