The Chinese-Filipino business family

Even during the pre-Spanish period of Philippine history, the ethnic Chinese trader was already known in the archipelago. While the Filipino native focused on farming, fishing and hunting, it was the Chinese trader that virtually monopolized the trade between China and this country. One evidence of this is Chinese porcelain, which have been found all over the many islands. It has been reported by historians that this porcelain took the place of currency.

Even during the Spanish period, the Chinese-Filipino businessmen and traders were already an integral part of Philippine society. However,  it was only 70 years ago that the Chinese business community organized a federation now called the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. (FFCCCII).

Last week, this organization celebrated its 70th anniversary. Its theme was “Dugong Tsino, Pusong Pinoy” – a legacy of commerce, philanthropy and progress. Its current president is the philanthropist and industrialist Dr. Cecilio K. Pedro. According to their anniversary supplement, Dr. Pedro personally coined the anniversary theme “Dugong Tsino, Pusong Pinoy.”

Over the past seven decades, the FFCCCII has represented the interests of the business community and the Chinese-Filipino community. In fact, it has become unofficially known as the spokesman of the community.

I have firsthand experience in dealing with the philanthropic activities of this community. During my time as head of the Presidential Management Staff during the administration of president Cory Aquino, I was in coordination with this organization for the building of several thousand classrooms all over the Philippines.

The FFCCCII has always demonstrated their commitment to national development, especially through philanthropic activities and spearheading the Buy Pinoy campaign. However, I would suggest to my friends in the Chamber that they should begin to look beyond philanthropy and engage in corporate social responsibility. For example, I would strongly suggest that they take an active leadership role in addressing the looming problem of climate change. This is an area that the business sectors all over the world is beginning to address and look for solutions.

Another area is one that is such a burden for the ordinary Filipino – the area of food production. While the construction of thousand school buildings is a laudable project, the Chamber might engage itself in the greater task of improving public education, as the education of our youth is such a critical area in national development.

There is no question about the magnitude of the ethnic Chinese business participation in this part of the world, including the Philippines. It is important therefore for us to learn and understand the unique social and cultural values that underpin their commercial practices. While there are many books on Chinese culture, one of the most educational books I have found is “Inside Chinese Business: A guide for managers worldwide” by Ming-Jer Chen, Harvard Business School Press, 2001.

Although the book was written two decades ago, I still find it very relevant. One of the most interesting distinctions is that there are some cultural differences between the Chinese that grew up in mainland China and the overseas Chinese communities. The basic reason is that Mao Zedong and, to a large extent, Xi Jinping have made the state the dominant institution in the Chinese community. The overseas Chinese, however, did not have to undergo this influence and grew up outside China, where the dominant influence was still the principles of Confucianism.

It is true that Western managerial principles are beginning to be felt in the Chinese-Filipino business as the new generation taking over have studied in western schools like Harvard and Wharton. Many of the new generation have also studied in Australia and Canada. However, the author Ming-Jer writes that almost all major Chinese organizations continue to be relationship-based and are influenced by an enduring set of cultural and social principles.

In the book, he writes about the four pillars of traditional Chinese business. First is that the Chinese business family is headed by a patriarch or a matriarch and family members hold key positions within the business. Even when the business is publicly held, the Chinese business family remains dominant.

The locus of control of a Chinese family business is normally the head of the family. Chances are that he or she is making all the important decisions for the business. Chinese family heads are hands-on executives and are accustomed to relying on their own judgments. The family leader has the final say in all the major decisions. This is the difference between the Chinese family business and the European or American family business, where the head of the family is not necessarily the head of the business.

Third is that the family business is more than the source of financial support, but also a connection to their past. Chinese family pride is as critical as economic success and prosperity.

Fourth, because of their family-centered organization, Chinese businesses do not rely heavily on external institutions such as banks and they function with a degree of flexibility difficult to imagine in a Western business context. The major Chinese family business of course either sets up its own bank or deals with those banks familiar with Chinese culture.

The traditional Chinese family is now in transition, as they go beyond their home markets into other parts of the world. However, I believe that the basic nature of the Chinese business family will remain for generations to come.

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