Munculnya dan evolusi perusahaan multinasional dari Hongkong dan

Singapura
- The emergence and evolution of multinational corporations from Hong
Kong
Introduction
Although the origins of Hong Kong-based MNCs can be traced(ditelusuri) to
the British colonial period and Hong Kongs position as an
entrept(gudang) for trade in South East Asia and China,
indigenous (adat) Chinese firms(perusahaan) based in Hong Kong
emerged(munculnya) as MNCs in the early 1950s, thus
reflecting(mencerminkan) a longer history by comparison to MNCs from
Taiwan and South Korea whose
emergence(muncul) can be traced(ditelusuri) to the early 1960s. Hong
Kong has grown to become a significant home country(negara asal) of
FDI(foreign direct investment) with an outward FDI stock of ,$154.9 billion
in 1998, or some 3.8 per cent of the global stock of outward FDI. Indeed, it
had become the worlds
tenth-largest source of FDI in that year based on the size of outward FDI
stock after the
United States (with a share of 24.1 per cent of the global stock of outward
FDI), United
Kingdom (12.1 per cent), Germany (9.5 per cent), Japan (7.2 per cent), the
Netherlands
(6.4 per cent), France (5.9 per cent), Switzerland (4.3 per cent), Italy (4.1
per cent) and
Canada (3.8 per cent). In fact, Hong Kong is almost as important as
Canada whose
outward FDI stock was $156.6 billion in that year. Thus, Hong Kong had
become a
significant source of FDI in the world economy, particularly more so in
relation to the
stock of outward FDI from developing countries where Hong Kong is the
single largest
home country with a share of almost 40 per cent.
Not only is Hong Kong comparable to Switzerland as a home country of FDI
in terms
of the size of outward FDI stock, the study of the emergence and evolution
of Hong
Kong-based MNCs is of interest as another case study of MNCs from a
resource-scarce
small country. The growth pattern of Hong Kong-based MNCs as it has
been evolving
over the last half century can thus be compared to those based in
Switzerland that share a
similar pattern of national economic development and whose longer MNC
history has
been analysed in the previous chapter in this part of the book.
Before the historical excursion into the history of Hong Kong-based MNCs,
it is

important to clarify two key points. Firstly, this Chapter relates to the
history of MNCs
based in Hong Kong which includes not only the outward FDI of indigenous
Chinese
firms in Hong Kong, but also outward FDI coursed through Hong Kong
whose ultimate
beneficial ownership can be traced to another country. This applies to the
outward FDI by
holding companies established in Hong Kong by Australia, the United
Kingdom and
other industrialized countries that have business interests in South East
Asia as well as
outward FDI by some of the trading and financial companies in Hong Kong
founded and
in many cases still managed and controlled by the British: John Swire and
Sons (HK Ltd), Hutchison International Ltd, Jardine Matheson and Company
and the Hong Kong
and Shanghai Banking Corporation (Wells, 1978).
In addition, since the 1990s there have been significant amounts of
indirect investments to China from Taiwan that were
channelled through Hong Kong owing to the illegality of direct trade
between Taiwan
and mainland China (see Chapter 10). The inclusion in Hong Kong-based
FDI of outward
FDI whose ultimate beneficial ownership can be traced to a third country is
important in
the analysis of outward FDI emerging from Hong Kong and helps to partly
explain the
prominent position of Hong Kong as a home country of FDI particularly in
recent years.
It is for this reason that the term Hong Kong-based firms or MNCs is used
throughout
this chapter and book.
Secondly, the government of Hong Kong does not collect data on inward
and outward
FDI in and from Hong Kong. Thus, the analysis of outward FDI from Hong
Kong has
had to rely on scattered reports and the scanty data and information
provided by the host
countries in which investment by Hong Kong-based MNCs had been
significant (Chen,
1981; Wells, 1978). Given the large number of significant host countries of
Hong Kongbased FDI and the different currencies and criteria used in the compilation
of data on
inward FDI in each host country which precludes any possibility of data
aggregation
across host countries, the analysis of Hong Kong-based MNCs is rendered
somewhat

difficult particularly with respect to the examination of the major types of

outward FDI,
the fundamental determinants of outward FDI and the major host
countries, as well as the
changes in these variables over time.
Bearing in mind these two caveats in the analysis of Hong Kong-based
FDI, this
Chapter aims to present a faithful account of the history of Hong Kongbased MNCs in
three time frames: from the 1950s to the 1970s, the 1980s and the 1990s.

- The emergence of Hong Kong-based MNCs from the 1950s to the 1970s
To understand the origins of Hong Kong-based MNCs is to understand the
economic and
political history of Hong Kong as a British colonial entrept. Indeed, from
its inception as
a British colony in 1841 until the mid-twentieth century, the integration of
Hong Kong in
he world economy had been dictated by its role as a trans-shipment point
for British
exports to China and, to a lesser extent, other parts of the region and as a
hub for Chinese
commodity and financial transactions with Europe and the United States
(Henderson,
1989). With a share of two-thirds of the exports (or re-exports) of Hong
Kong, China
remained the principal export market of Hong Kong until 1951 (Phelps
Brown, 1971).
The virtual elimination of the entrept trade with China as a result of the
Chinese
Revolution of 1949 and the Korean War of 195053 which led to the export
embargo on
all goods of Chinese origin to the United States and the prohibition
imposed by the
United Nations on the export of essential materials and strategic goods to
China

15
- The emergence and evolution of multinational
corporations from Singapore
Introduction
Owing to their status as British colonial entrepts, the origins of both
Singapore-based
MNCs and Hong Kong-based MNCs can be traced to the British colonial
period with the

outward FDI of British companies based in these countries and some

Chinese immigrants
in Singapore. Thus, MNCs based in the Asian newly industrialized city
states have a far
longer history by comparison to MNCs based in the Asian newly
industrialized countries
with larger domestic markets, Taiwan and South Korea. With an outward
FDI stock of
$47.6 billion in 1998 or some 1.2 per cent of the global stock of outward
FDI, Singapore
was not as significant a source country of FDI as Hong Kong with $154.9
billion but
considerably more significant than Taiwan with $38 billion and South Korea
with $21.5
billion. Indeed, Singapore constituted the second-largest home country
based in
developing countries in 1998 after Hong Kong with a share of some 12.2
per cent of the
stock of outward FDI from developing countries in that year.
The study of the emergence and evolution of Singapore-based MNCs is of
interest as
another case study of MNCs from a resource-scarce developing country
with a small
domestic market. The growth pattern of Singapore-based MNCs as it has
been evolving
since the British colonial period can be compared most directly to those of
Hong Kong,
another newly industrialized country in Asia, or more broadly to that of
Swiss MNCs
whose home countries share similar patterns of national economic
development and
whose histories have been analysed in the previous chapters in this part of
the book.
Before the excursion into the history of Singapore-based MNCs, it is
important to
clarify two key points. This chapter refers to the history of MNCs based in
Singapore
which includes not only the outward FDI by locally owned or indigenous
Chinese firms
in Singapore, but also outward FDI by wholly or majority-owned foreign
affiliates in
Singapore whose ultimate beneficial ownership can be traced to another
country. Owing
to its history as a British colonial entrept and a Crown colony since 1867,
Singapore was
a base for the economic expansion of the British empire in Malaya, South
East Asia and China until the Second World War as well as a base for
Britains military expansion in

East Asia until the late 1960s. The dominant role of foreign based MNCs in
the modern
economic history of Singapore meant that the role of Singapore as a base
for the growth
of their outward FDI in South East Asia and China prevailed since the
Second World
War. Since the 1970s, the development of Singapore as an international
financial centre,
the presence of a strong domestic currency, domestic political and
macroeconomic stability, the relatively liberal financial regime as well as a
safe haven for some excess
savings of countries in South East Asia has also made the country an
important financial
base from which foreign companies launch outward FDI in the region (see
also Lim,
1990). Indeed, the share of wholly and majority-owned foreign companies
in the stock of
outward FDI from Singapore reached 47.7 per cent in 1981 and although
such share had
been declining in the first half of the 1980s to reach a trough of 25.9 per
cent in 1985, it
climbed rapidly since to 33.6 per cent in 1989 and 56.4 per cent in 1993.
Conversely, the share of wholly and majority-owned local companies or
indigenous Chinese MNCs based
in Singapore has been declining in significance. Their investments are
accounted for not
only by indigenous Chinese firms, some of which are family owned, but
perhaps more
importantly by the state-owned corporations and government-linked
companies,
companies established abroad originally by Chinese families that
transferred their
operations to Singapore in the 1970s as well as companies formerly
foreign owned but
subsequently acquired to become Singaporebased MNCs.
3 The dominant role of foreign
companies and state-owned companies in Singapore made the role of
indigenous private
enterprises in Singapores industrialization and outward FDI far less
significant. Both the
significant role of foreign companies as well as the peculiar nature of local
companies
based in Singapore help to explain the large amounts of outward FDI
emerging from Singapore, particularly in neighbouring countries. It is for
this reason that the term
Singapore-based firms or MNCs is used throughout this chapter and book.
Secondly, the government of Singapore has not published data on outward
FDI from
Singapore until the 1990s.
Thus, as in the case of Hong Kong the analysis of outward

FDI from Singapore has had to rely at times on scattered reports and the
scanty data and
information provided by the host countries in which investment by
Singapore-based
MNCs had been significant. Given the large number of significant host
countries of
Singapore-based FDI and the different currencies and criteria used in the
compilation of
data on inward FDI in each host country which precludes any possibility of
data
aggregation across host countries, the analysis of Singapore-based MNCs
is rendered
difficult particularly with respect to the examination of the major types of
outward FDI,
the fundamental determinants of outward FDI and the major host
countries, as well as the
changes in these variables over time.
Bearing in mind these two caveats in the analysis of Singapore-based FDI,
this chapter
aims to provide a faithful account of the history of Singapore-based MNCs
as it relates to
the unique pattern of the domestic industrial development of Singapore in
three time
frames: from the British colonial period to the 1970s, the 1980s and the
1990s.