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University of British Columbia Department of Economics Economics 336 Canadian Economic History Professor Catherine Douglas

Term Paper Cover Sheet and Declaration

Students Name: Birat Lekhak Student Number: 38680096 Title: An Analysis of Chinese Immigration to Canada Declaration: I understand the Universitys policy on academic integrity.(see www.students.ubc.ca/calendar/index.cfm?tree=3,54,111,959). The ideas and written work submitted for this assignment are my own except where properly cited. This work has not been presented by myself or another person for grading in another course. I understand that assignments will not be graded unless accompanied by this cover sheet and signed declaration.

Signed: Birat Lekhak

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Introduction There has been a substantial demand for skilled labour in Canada, with immigration restrictions loosened and an influx of immigrants arriving annually. Due to the increase in immigration, the Canadian population is becoming increasingly diverse. As of May 2001, 18.4% of Canadas population were born outside the country. According to the 2001 census, the Chinese are the largest visible minority group in the country, with around 1,029,400 people.1 This paper aims to examine the historical influences and the economic incentives that have driven the Chinese to immigrate to Canada. I shall demonstrate that the early Chinese immigrants came to Canada due to the rewards promised by the discovery of gold as well as relatively high wages gained by employment in the mining, construction, and agricultural sectors. These early migrants left due to poor living conditions at home and the lure of wealth and prestige in the New World. The Chinese immigrants in the modern era arrived mainly due to the insecurity following the Tiananmen Square incident and also the handover of Hong Kong to the Chinese. The growth of the middle class in their home countries as well as the loosening of immigration restrictions were conducive to their migration as Canada faced a shortfall of skilled labour. However, a number of recent Chinese immigrants have been disillusioned because their credentials and work experience have not been recognized. As a result, most are employed in positions that do not match their qualifications. Such difficulties have led to a feeling of alienation, with a number of Chinese immigrants desiring to return home, a prospect that is alarming for a Canadian economy that is highly dependent on skilled immigrants.

Shibao Guo and Don J. De Voretz, The Changing Faces of Chinese Immigrants in Canada, Journal of International Migration and Integration, 2006, 7(4), 275.

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Lees Theory of Migration To analyze the Chinese migration to Canada, I shall utilize Everett S. Lees theory of migration. The theory states that the origin and destination countries have various push (negative) and pull (positive) factors that determine the propensity of a person or group to migrate (see chart 1). 2 Lees theory consists of four variables: (i) Factors associated with the area of origin; (ii) factors associated with the area of destination; (iii) intervening obstacles; (iv) and personal factors. Factors that pull a person to stay in their place of origin include longterm sentimental acquaintance of the area and a desire not to leave familiar surroundings, friends, and family behind. Furthermore, fears of assimilating in a new environment may discourage people from migrating. Factors that may push people to move out of their country of origin can be things such as low security, violation of political freedoms, or simply better financial opportunities abroad. Furthermore, potential migrants have to overcome intervening obstacles in order to migrate successfully. These obstacles can vary in magnitude and affect people in different ways. The cost of relocating is one such obstacle, which affects people differently, depending on their financial stature. Tunnelling under the Berlin Wall or sea voyages to the New World on the 18th century on the other hand are examples of harder intervening obstacles for migration.3

2 3

Everett S. Lee, A Theory of Migration, Demography 1966, 3(1), 50. Ibid.,

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Early Arrival of Chinese Immigrants in Canada The Chinese diaspora is said to be one of the oldest in Canada.4 According to Con et al, the first group of Chinese arrived in search of gold on June 28, 1858 in Victoria, British Columbia.5 Most of the early immigrants were single men from rural areas and came as coolie workers and chain migrants.6 Apart from the goldfields, they found employment as domestic servants, coal miners, and seasonal workers in the salmon-canning industry. Furthermore, they also were employed for the construction of the Canadian Pacific Railway. The Chinese provided cheap labour and thus were integral to the construction of the railway, which was a precondition to British Columbia joining the confederation. Following the completion of the railway, many Chinese were left with little work and were no longer deemed useful by the government. Furthermore, a $50 head tax was introduced following the passage of the Chinese Immigration Act of 1885. 7 Furthermore, the aforementioned tax was later increased to $100 in 1900 and to

4 5

Guo and DeVoretz, 5. H. Con, R. J. Con, G. Johnson, E. Wickberg, and W.E. Willmott (1982), From China to Canada: A history of the Chinese communities in Canada. Toronto, ON: McClelland and Stewart. 6 Guo DeVoretz, 5. 7 Ibid.,

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

$500 in 1903.8 This amount is approximately $8000 in todays terms and added an additional cost equivalent to roughly two years of wages as a labourer.9 Apart from the tax and antiChinese sentiment, there was an additional intervening obstacle the expenses of the transPacific passage. Migrants would often have to pay middlemen and endure long voyages to reach Canadian shores. However, despite all these impediments, nearly 100,000 Chinese still came to Canada and the United States via Victoria and Vancouver between 1885 and 1923.10 As Henry Yu states, the life cycle of upward mobility and the creation of wealth in Canada was worth taking the long journey despite the high initial costs.11 Yu states that early Chinese migration displayed characteristics of chain migration, which he defines as the process by which an initial set of migrants creates a set of social practices across space and through time that facilitates the movement of other migrants along the same path.12 For this to occur, there should be a migration network that relied on good intelligence about wages, available jobs, local economies, and the value of goods that could be moved. 13 The early Chinese settlers would send word back to their relatives about the improvement in earnings and standard of living in Canada which would entice future generations to follow in their footsteps and paved the way for a Chinese migration network to Canada. Yu asserts that young men left small villages, inspired by stories of opportunity and success narrated in the village by wealthy returnees or in the voluminous letters that flowed back and

8 9

Ibid., Yu, 180. 10 Henry Yu, in Mountains of Gold: Canada, North America, and the Cantonese Pacific, in Routledge Handbook of the Chinese Diaspora, edited by Chee-Beng Tan, 180. 11 Ibid., 12 Ibid., 177. 13 Ibid.,

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

forth across the Pacific. 14 Upon arrival, the Chinese were initially established in British Columbia but slowly made ventures eastward, as shown by Figure 1.

Applying Lees Theory of Migration: The Push and Pull Factors for Early Migrants Why were Chinese immigrants so enticed to migrate to Canada? This section deals with the economic incentives for early immigrants to leave China and move to Canada. Most of the early migrants arrived from the Guangdong province, where there was scarce farmland. Out of the eight districts in that region, only four had rich soil and in the other four districts, only 10% of the land was suitable for cultivation.15 Furthermore, from 1780 to 1850, the population increased from 16 to 28 million people while the cultivation of land remained the same. This surge in population resulted in a land shortage and higher farmland rents. The people who did

14 15

Ibid., 179. The Early Chinese Canadians 1858 1947, Library and Archives Canada, http://www.collectionscanada.gc.ca/chinese-canadians/021022-1100-e.html

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

not own fields faced a difficult ordeal as food was scarce. Canada, on the other hand, was a better environment for the migrants to sustain their livelihood and feed their family. Another push factor was the poor living conditions in China at the time, which led to a peasants revolt in 1851. The rebellion claimed 20 million lives and other wars claimed around 150,000 lives between 1854 and 1868.16 Farmers were forced into armies, crops were devastated, and bandits raided villages. Therefore, some Chinese left for Canada in search of a better life and to get away from the turmoil that was ensuing in China. The most important pull factor would be the discovery of gold along the Fraser River in British Columbia. This brought thousands of Chinese, who were working in California, into the region. Furthermore, there was a considerable need for labour for the development of British Columbia and thus, the Chinese came in droves to build roads and clear lands, and as mentioned earlier, build the railway. Furthermore, they also found considerable employment in coal mines, canneries, and farms.17 Soon, word spread back home about the allure of the Gold Mountain and boatloads of Chinese arrived mainly from Guangzhou and Hong Kong. The people who were successful in their endeavours were named Gum San Hak or Gold Mountain guest. There was a certain amount of prestige that went with being a Gum San Ha and women dreamed of marrying one. For them, it meant the possibility of a large house and continuous remittances from abroad that could pay for luxury goods and childrens education. 18 In the late nineteenth and early twentieth century, young Chinese men journeying into Canadas aspirations were organized into an idealized life cycle: 1) leave the village as a

16 17

Ibid., Ibid., 18 Yu, 180.

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

young man, generally through financial support from older generations who were already overseas; 2) work for 5-10 years as a labourer in industries such as construction, farming, logging, mining, or canneries in order to pay off the debt accrued for the migration; 3) once the loans are paid off, return back to the village and start a family, and then return overseas and send remittances back home for the purchase of property and create savings; 4) find labor work where it is possible to learn a small trade (cook, waiter, laundry washer, etc.); 5) work diligently to be recognized by an elder as responsible enough to be loaned money and get a partial stake in a business; 6) work toward paying this loan off and acquiring a larger state in one or more business, to the point of eventually becoming an elder with enough wealth to begin loaning money and investing in young men of the next generation who show potential.19 Depending on the intelligence of the individual and economic conditions, a man might never get out of the debt and spend his life as a labourer, growing ever older with an ever decreasing capacity to sell his labor.20 However, if a man was intelligent and fortunate, he could amass considerable wealth to become an investor himself by middle age and make loans to newer migrants and benefit from the loan re-payments of his carefully chosen ambitious young men. For example, owning half of a laundry or restaurant could allow a man to make an arrangement with a younger relative who had shown an aptitude for running the business. He could then make more investments from the regular payments by the younger man over an agreed schedule or retire home in the village or to Hong Kong.21

19 20

Ibid., Ibid., 21 Ibid., 181

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Obstacles to Early Chinese Immigration As stated earlier, the head tax was not effective in barring Chinese immigration. The pull factors from the new world, and particularly Canada, was quite strong. Chinese immigration went against the governments policy of promoting immigration among the desirable British and Western Europeans.22 As such, the federal government passed the Chinese Immigration Act in 1923, which virtually prohibited all Chinese immigration into Canada until its repeal in 1947.23 Furthermore, the Chinese also faced other types of discrimination, for they were denied citizenship, could not vote, and were prohibited from entering in certain professions such as law, medicine, or accounting. In addition, they were also denied the ability to purchase Crown land.24 Thus, it was not all rosy for the Chinese migrants and these policies decreased the numbers of Chinese immigrating to Canada. Even after the repeal of the Chinese Immigration Act, federal immigration policy remained highly restrictive in the admittance of Asians. The Point System In the mid-1960s, however, Canada experienced a labour shortage amidst its great postwar boom and skilled labour was required to help build the expanding Canadian economy.25 Europe could not meet Canadas needs and therefore the Canadian government turned its recruitment efforts to . . . Asia.26 A point system was introduced in 1967 that admitted immigrations based on their skills, education, and resources, rather than their religious and racial
22 23

Guo and Devoretz, 279. Ibid., 24 Ibid., 25 Ibid., 280. 26 Ibid.,

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

backgrounds. This system was successful in reversing the pattern of immigration to Canada from Europe to Asia.27 The factors that previously hindered Chinese immigration to Canada were removed and the pull factors enticing people to Canada existed again. This can be seen by the fact that from 1956 to 1967, Canada admitted only 30,546 Chinese immigrations whereas after the introduction of the point system, the number increased to 90,118 between 1968 and 1976.28 Push and Pull Factors in the Post-war Period and the Modern Era Whereas most of the early Chinese immigrants were from mainland China, and specifically the Guangdong area, the majority of immigrants in the post-war period arrived from Hong Kong.29 According to Wong, there were three major waves of emigration arising from Hong Kong since the end of World War II. The first arose between 1958 and 1961 due to dramatic changes in Hong Kongs agriculture.30 The second occurred due to the 1967 riot that was a spillover of the Cultural Revolution in China. As Guo and Devoretz state, threatened by bombs and political instability, thousands left Hong Kong for the United States and Canada31 The third wave began in the 1980s, after the 1984 Sino-British Agreement on the future of Hong Kong. Furthermore, Chinas heavy-handed suppression of the student demonstrations in Tiananmen Square alarmed Hong Kong residents. 32A number of residents, who were concerned about their future, began to leave Hong Kong. These were predominantly young, educated, and

27 28

Ibid., P.S. Li, The Chinese in Canada (1998), Don Mills, ON: Oxford University Press 29 S.L. Wong, Emigration and stability in Hong Kong (1992), Hong Kong: University of Hong Kong. 30 Ibid., 31 Guo and Devoretz, 280. 32 P.S. Li, The Rise and Fall of Chinese Immigration to Canada, International Migration 43(3), 2005, p.19

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

middle class professionals.33 Another commonly cited reason that allowed many Hong Kong residents to immigrate to Canada was Hong Kongs economic prosperity and growth in the early 1990s [which] . . . facilitated capital accumulated and provided the middle class with the financial means and ease to immigrate. 34 China on the other hand, was isolated from the rest of the world since the inception of the Peoples Republic of China in 1949. However, the establishment of formal diplomatic relations with Canada in 1970 and the death of Mao Zedong and the end of the Cultural Revolution in 1976 paved the way for Chinese emigration to Canada. Furthermore, the pro-democracy movement of 1989 and governments violent reprisal (Tiananmen Square) became a catalyst of Chinese emigration. Furthermore, in the 1990s, China relaxed its passport restrictions and the economic boom resulted in a growth of a middle class that could afford to immigrate to Canada. The opening of a Canadian immigration centre in Beijing also reduced the barriers to Chinese immigration.35 In Taiwans case, there were two events in the 1970s that made Chinese people turn to emigration to Canada as a solution to their future. The first was the withdrawal of the Republic of China from the United Nations and the concomitant acceptance of the Peoples Republic of China (PRC) as the sole legitimate government in China.36 The other reason was the

33 34

Ibid., 281 Li, (2005), 25. 35 Ibid., 36 Ibid.,


Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

normalization of relations between the United States and China in 1978, which worried many Taiwanese people . . . that Taiwan might be eventually be reclaimed by Communist China.37 Deskilling and Slow Assimilation According to the wealth-maximization thesis, migrants move to countries where economic returns to their human capital are higher than in their home country.38 And when people migrate, they carry their human capital, which is defined as educational attainment and work experience. These are generally gained in individuals home countries, and it is commonly believed that the national origin of an individuals capital is a critical determinant of its value39 However a grim reality faced by many immigrants is that the host countries do not recognize their human capital, leading them to face periods of unemployment or working at jobs below their qualifications. As a result, immigrants in the host country begin their working lives with lower wages than native-born workers of similar education and age.40 To overcome these barriers and gain recognizable credentials, many immigrants have to delay their participation in the Canadian labour market and are forced to spend extended periods of time taking credit or non-credit courses in universities and colleges in order to obtain Canadian-specific education and certification. 41 Consequently, Chinese immigrants that arrived between 1980 and 2000 had much lower incomes as opposed to the general Canadian population. In 1999, their average total income was a little under $15,000, which represented only half of that for the general

37 38

Ibid., 282. Shuguang Wang and Lucia Lo, Chinese Immigrants in Canada: Their Changing Composition and Economic Performance, International Migration (2005), 43(3), p38. 39 Ibid., 40 Ibid., 41 Ibid, 40.


Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

population. 42 The up-ward mobility thesis states that new immigrants usually experience a transitional period of low income. 43 The thesis asserts that over time, immigrants may catch up to, or even outperform, their native counterparts. Wang and Los research suggests that if the thesis holds true, it would take more than 20 years for the Chinese immigrants to close the earning gap.44 However, the signs are discouraging because even those immigrants who have been in Canada for over 20 years have yet to close gap in total income with the general population. A survey of 102 Chinese immigrants who landed in the 1990s has revealed that only 15% held jobs that were in link with their Chinese education and work experiences [and] 52% were working at a job that did not match their education and experience at all.45 These findings demonstrate that the credentials of many Chinese immigrants have failed to be recognized and suggest that the Canadian labour market may not be fully competitive. 46 Chinese immigrants have, thus, experienced great difficulties in accessing education-related professions and trades in Canada. 47 Wang and Lo claim that the inability to succeed in economic participation makes immigrants feel disadvantaged and excluded, and may negatively affect their confidence about the merits of remaining in Canada to fulfil their immigration dream and commitment. 48 This is exemplified by a recent internet survey conducted by the North Chinese Community of Canada which found that only 20% of the 1,345 participants indicated they would remain in Canada after obtaining Canadian citizenship. 49 Given that Canada is about to face a skilled labour

42 43

Ibid., 52. Ibid., 61. 44 Ibid., 45 Ibid., 62. 46 Ibid., 52 47 Ibid., 62. 48 Ibid., 63. 49 Ibid.,


Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

shortage, such alienation faced by Chinese immigrants should not be taken lightly, especially considering they form the bulk of the immigrant community. Conclusion The Chinese were one of the first immigrants to arrive to Canada and now form a considerable portion of the visible minorites. The early immigrants initially arrived due to the push factors of insecurity and harsh living conditions as well as the pull factors of the Gold Rush and the prestige and wealth gained by employment in Canada. Early immigrants were crucial to the completion of the railway and found employment in areas such as construction and agriculture. However, it was not all rosy for the immigrants. Despite the higher wages, they were subjected to discrimination and barred from entering certain industries. Official government policy was also discriminatory, as evidenced by the Chinese Head Tax and the Immigration Act. The modern Chinese immigrants arrived in Canada due to instability and uncertainty following the Tiananmen Square incident and the return of Hong Kong to China. The financial obstacles to emigrate were also reduced due to the economic boom and the rise of the middle class in China, Hong Kong, and Taiwan. Canadas relaxed policy towards immigration and the opening of immigration offices in China also reduced impediments to Chinese immigration. Canada provided the promise of higher wages as arguably a higher stand of living and better social welfare. However, immigrants still face considerable difficulty in assimilating to the Canadian economy. A considerable amount of their credentials are not accepted and a number of immigrants hold jobs that do not match their qualifications. Therefore, some Chinese immigrants have feel alienated from the workplace and some even desire to return to Asia. In light of this phenomenon, the author is of the opinion that the Canadian government must do more to assist

Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

immigrants in entering the workforce and ease their transition to the Canadian economy. As acknowledged by the House of Commons Committee on Immigration, the Canadian Government lacks adequate settlement services to help them adapt.50 Better integration policies such as the provision of programs to increase the relevance of migrants existing qualifications and workfocused language training programs are some ways to mitigate immigrant alienation.51 Better settlement would result in increased economic performance of Chinese immigrants and would strengthen the Canadian economy as well as maintaining social cohesion.

50 51

Ibid., 64. Will Somerville and Madeleine Sumption, I mmigration and the labour market: Theory, evidence, and policy, Migration Policy Institute, Equality and Human Rights Commission, (2009),37


Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Works Cited Con, Harry, and Edgar Wickberg. From China to Canada: a history of the Chinese communities in Canada. Toronto, Ont.: McClelland and Stewart in association with the Multiculturalism Directorate, Dept. of the Secretary of State and the Canadian Govt. Pub. Centre, Supply and Services Canada, 1982. Guo, Shibao, and Don J. De Voretz. "The Changing Faces of Chinese Immigrants in Canada." Journal of International Migration and Integration 7, no. 4 (2006): 275-300. Lee, Everett S. . "A Theory of Migration." Demography 3, no. 1 (1966): 47-57. Library and Archives Canada. "ARCHIVED - Why the Chinese Came to Canada - The History The Early Chinese Canadians, 1858-1947 - Library and Archives Canada." Welcome to the Library and Archives Canada website. http://www.collectionscanada.gc.ca/chinesecanadians/021022-1100-e.html (accessed April 5, 2013). Li, P.S.. The Chinese in Canada . Ontario: Oxford University Press, 1998. Li, P.S.. "The Rise and Fall of Chinese Immigration to Canada." International Migration 43, no. 3 (2005): 9-34. Somerville, Will, and Madeleine Sumption. "Immigration and the labour market: Theory, evidence, and policy." Migration Policy Institute (2009) Wang, Shuguang, and Lucia Lo. "Chinese Immigrants in Canada: Their Changing Composition and Economic Performance." International Migration 43, no. 3 (2005): 35-64. Wong, Siu. Emigration and stability in Hong Kong. Hong Kong: Social Sciences Research Centre, in association with the Department of Sociology, University of Hong Kong, 1992.


Birat Lekhak 38680096 ECON 336 Prof. Catherine Douglas Term Paper: An Analysis of Chinese Immigration to Canada 08/04/2013

Yu, Henry. "Mountains of Gold: Canada, North America, and the Cantonese Pacific, ." In Routledge handbook of the Chinese diaspora. London : Routledge, 2013. 180.