Adapting to local markets and political changes: Chinese businesses in Malaysia and Indonesia

Abstract

ABSTRACT The economic prosperity of Asian tigers is largely dependent upon the role of ethnic Chinese in forming an economic elite across the countries. The emerging countries of Asia are a diverse group, but Malaysia and Indonesia have a shared history that results in a familial bond between these two countries, with embedded similarities in language, culture and religion. Both countries have experienced an important structural shift in Chinese Malaysian and Chinese Indonesian businesses. Studies have also shown that these ethnic businesses function successfully in their home countries, resulting in inter-ethnic business partnerships between Chinese and Bumiputera or Pribumi, to the extent that collaboration is seen as one of the strategies for business survival. This has led to changing perceptions of ethnic ties. However, scholars have often neglected the relationship between ethnic businesses and political changes with regard to small and medium enterprises (SMEs) in Malaysia and Indonesia across generations. To shed some light on the issues and challenges of ethnic Chinese businesses in Malaysia and Indonesia, especially SMEs, we investigate cultural assimilation and adaption process to demonstrate how an ethnic enterprise functions following the emergence of political changes across generations in terms of its targeted market and the types of goods and services it provides.