Pull: Opportunity and Comparative Advantage
According to most of my respondents, the Philippines offer all kinds of opportunity and business advantage. These include:
- 1. Low cost. Nearly everyone agreed that the cost of doing business in the Philippines is lower than in China. Ordinary people cannot afford the high start-up investment necessary to set up a grocery store in China owing to high rents and the need for long-term contracts. In the Philippines, however, one can rent a stall at a lower price and on a more flexible lease. Some newcomers even start up a grocery store just a week or so after arriving in the country.
- 2. Strong purchasing power and conspicuous consumption: Rich or poor, most Filipinos enjoy shopping, unlike ethnic Chinese Filipinos or Chinese migrants, who are more tightfisted. The growing Filipino middle class like to buy cheap Chinese goods (Landingin 2007).
- 3. Low-intensity commercial competition: Go Bon Juan, research director at Kaisa (Unity), has argued that Chinese Filipinos’ long history of commercial activity and their commercial ethos accounts for their dominance in business (Juan 1996). Many respondents pointed out that both Chinese Filipinos and new Chinese migrants have a better instinct for business than Filipinos. As a result, Chinese face less market competition than in China. Many respondents believe that they can thrive if they are industrious and smart enough.
- 4. Good commercial credit: Having commercial credit is seen as essential by many new Chinese immigrants. They admit that both Chinese Filipinos (Tsinoy) and other Filipinos (Pinoy) have more access to commercial credit and a better reputation than they do. They believe that, if they abide by local commercial rules and have high commercial credits in the Philippines, they can succeed in business. Many new Chinese migrants start their grocery store within a few weeks or even days of their arrival, even though they lack sufficient capital. What they depend on is the credit within their family and coethnic networks, which still works in Chinatown as the traditional Chinese businessmen’s survival principle. With the help of relatives and friends, or simply on the basis of their own credit worthiness, anyone in the community can borrow money or buy goods from the wholesalers with a grace period of up to five months. If the debtors fail to pay back on time, they lose their credit and their standing in the community, which they do not want to do.14 For Chinese migrants who have insufficient resources, only credit can ensure their business success. If they go bankrupt and lose their credit and reputation, their situation is hopeless.
- 5. Flexible law enforcement. Flexible law enforcement is often more or less equivalent to corruption in the Philippines, and is seen as a commercial advantage by many new Chinese migrants. Elsewhere, for example in the USA or Brazil, undocumented migrants can only engage in unlawful work, but in the Philippines, despite laws limiting foreigner’s participation in retailing, most new Chinese migrants work in grocery stores because the government turns a blind eye to their commercial activities. It is an open secret that immigrants, legal or illegal, can bribe government agencies, immigration agents, policemen and other officials.
If the social capital of Qiaoxiang and the existing migration network provide an external opportunity for Fujianese’s new transitional movement, then the business opportunity and comparative advantage in the Philippines are important pull factors. However, the above factors are not sufficient to explain Chinese immigration since the late 1970s. An exploration of migrant life and business in the host country is necessary for a fuller understanding of Chinese migration.