A Tale of Two giant Diasporas: How Chinese Diaspora outperformed their Indian Counterparts?

Author:   Sadananda Sahoo

A Tale of Two giant Diasporas: How did the Chinese Diaspora outperform their Indian Counterparts?

Sadananda Sahoo

Diasporas are a defining phenomena in the globalised world today. They are the people who live outside their home country but have socio-cultural and emotional roots in back in the home country. Various political-economic, historical and environmental forces attract or compel people to leave the country of their origin which subsequently forms the diaspora. In the global population, diasporas are roughly 230 million in count.

Indian economy is very often compared with that of China’s. In fact lots of economic comparison can be fruitful if we take the diaspora contribution in to account. Chinese and Indian diaspora are two giant diasporas in the world, combined together the population in both the diaspora roughly ranges from 80 million to 90 million. Some estimate by the Director of Overseas Chinese Affairs Office, the State Council, China mentioned that the number of Chinese in the diaspora is 60 million in 2013. Various estimates including the Ministry of Overseas Indian Affairs on Indian diaspora also mentioned that the number of Indian diaspora is ranging from 25-30 millions.  The number of these two diaspora can cross one billion within next few years for reason that there are growing demands for labour in global job markets especially in many European and USA countries. In addition to this, the advancement in technology and transport facilities further boasts to the human movement across the globe. The number in the Indian diaspora can grow faster than the Chinese diaspora in the coming two decades as the Chinese population getting aging and Indian population is getting younger.


The making of diaspora

Chinese and Indians have been migrating internationally for centuries and both inherit old civilisations. In the pre-colonial era, both Chinese and Indians migrated to many other countries as explorer, business men, traveller. Most of the old diasporas have assimilated in the host societies through intermarriages as the population was very small and there was no frequent contact with the home country. The Chinese Burma, Thailand, Indonesia and the Indians in Indonesia, Burma are also example of assimilation. However, it is the colonial regime under the European power which made drastic demographic change by importing large number of labour from these two countries after the abolition of slavery. Subsequently, the free flow of migration continued as professional and labour in 70s and 90s. The mass migration and their settlement provided more scope for preservation of cultural and social traits. The two diasporas are very much linked to their home countries despite ideological, ethnic and identity contradictions some occasions.

Spread out across the globe, these two giant Asian diasporas redefined the demographic, social, cultural, political and economic profiles of many countries in the world today. They constitute majority of population in quite a few countries such as in Guyana, Surinam, and Mauritius. Sometimes, the population of Indian diaspora is more than 50 percent in countries such as Trinidad and Tobago. Similarly the Chinese diaspora are a sizable number i.e approximately 33 million in neighbouring Asian countries such as Thailand, Indonesia, Singapore, Laos, Mynmar etc. Both these diasporas have impacted on the home countries. Two diasporas provide wonderful insights on how the diaspora engages with homeland over the time and how to draw lessons that will help the countries to play a greater role in the globalised world.   

Chinese and Indians have been migrating internationally for centuries and both inherit old civilisations. In the pre-colonial era, both Chinese and Indians migrated to many other countries as explorers, business men, and travellers.

Investment and Enterprise

There is no doubt that Chinese diaspora are more enterprising and have a long history of entrepreneurial culture. Old diasporas in the case of China are mostly spread across neighbouring countries in Southeast Asia. Whereas the old Indian diasporas in the same region are culturally active but economically not so active with the home country. The old Chinese diaspora economically vibrant and is one of the leading investor in China. Besides, they also play a great role in promoting the China’s economic interest in those regions. China has experienced one of the most remarkable investment booms over the past 3 decades and has become a model for many emerging countries. Foreign direct investment increased from US$600 million in 1983 to $40 billion in 2000, $117.6 billion in 2013. Chinese diaspora is the leading investor i.e 70% of China’s recent foreign investment has been provided by diaspora members according to some estimate. Similarly the outward investment by China was tremendously facilitated by their diaspora. Thanks to China’s successful strategies in engaging their own diaspora who are geographically close to the country. India’s engagement with her neibouring countries and diaspora is not very business friendly; most of issues are rather related to social and ethnic problems. Even the effort in the South Asian Association for Regional Cooperation (SAARC) is not very successful in engaging the countries and people in a cooperative manner. Most of the enterprising communities in the region have lost their network (including diasporic network) over the period.  

Barring few enterprising communities such as Sindhis, Gujaratis, Chettiars, the large scale enterprise culture among Indian diaspora has emerged since last 30 years especially in USA, UK and partly in Gulf countries. Diaspora investment in India is still not encouraging. The overall Foreign Direct investment to India is about USD 24.29 billion in 2013-14 as against USD 22.42 billion in 2012-13. The diasporic investment is very negligible. It is a big question on why India has failed to attract FDI in general and diaspora investment in particular? Barring few areas such as software, healthcare, the Indian diaspora investment and entrepreneurial activities are very less in India. Though India has been the largest receiver of remittances in the world which is about 71 billion US dollar in 2013 as compared to China’s 66 billion US dollar according to World, yet most of these remittances are not investment purposes.

Brain Chain

In recent years we find the policies related to the human and financial capital gaining serious attention. Diasporas are no more considered as brain drain rather they are a transnational network of knowledge pools which can be mobilised for mutual economic, social, cultural and political gains. Efforts are being made from both China and India to harness the diaspora knowledge through philanthropic networks, institutional collaboration, alumni associations, regional associations. Both diasporas are gaining momentum in this areas in recent times. The diasporas are forthcoming where there is mutual gain rather than one-sided. Chinese diaspora scores high in creating brain chain among diasporas than that of India’s. Thanks to China’s open policy, tax regime and policy support to diaspora Chinese as venture capitalist who also complemented in providing global platforms to native Chinese entrepreneurs.  

Complex Engagement

The actual process of engaging diaspora in the development process is an important policy challenge for the home countries. As policies are outcomes of complex interplay of local and global conditions, including the lobby groups, socio-economic and political conditions of the country, level of development of the home and host countries, technological progress and  institutional development such as financial, educational, social etc., diaspora policies differs from countries to countries and time to time. The development engagement is always mediated through social and cultural identities of the diaspora, which are not only very diverse but are also spaces for social, political and ideological contestation. Developing countries face different challenges in the emerging scenario as compared to the developed countries. India and Chinese diaspora will provide insights on how two countries dealt with their own diaspora. The salience of soft skills and knowledge in the new knowledge economy has also been leveraged by developing countries that have a sizable diaspora population. A meaningful diasporic engagement with their respective home countries vis a vis host countries can change the future of entire Asian region to a great extent.


Dr. Sadananda Sahoo is a scholar on International Migration and Diaspora and Faculty at School of Interdisciplinary and Trans-disciplinary Studies, Indira Gandhi National Open University, New Delhi, India

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