Keynote Speech by Singapore's Senior Minister Lee Kuan Yew

Chinese entrepreneurs in Melbourne had to vie with their counterparts in other Australian cities to host the 5th World Chinese Entrepreneurs Convention. In every major Australian city today, there is a vibrant Chinese community which is no longer concentrated in its Chinatown. They have spread into suburbia and are well-represented in business, the professions, the universities, and, increasingly, in state and federal politics.

It is the same trend in other parts of the world. An outstanding example is the role of Chinese immigrants in California's Silicon Valley. Writing in the Wall Street Journal on June 24 1999, a University of California in Berkeley professor described how Asian immigrants working as entrepreneurs are helping to reshape the Valley, and nearly 25% of the high-tech companies started since 1980, are run by ethnic Chinese and Indian immigrants. Chinese immigrants alone accounted for over 17%. These figures probably understate the contributions of immigrant entrepreneurs many of whom work for companies run by the American-born. In recent years, more of these companies are run by Asians. Asian immigrants in the Valley are not only strong technically, they are also recognised for their managerial abilities. What is happening in Silicon Valley is gradually spreading to other parts of North America.

All over the world, Chinese entrepreneurs are playing a growing role in the global economy. That is the reason why this World Chinese Entrepreneurs Convention has grown from strength to strength. It is partly the result of the migration of large numbers of talented Chinese from Taiwan, Hong Kong and Southeast Asia to Australia, New Zealand, North America and Europe over these years. Since the opening-up of the Chinese economy in 1979, there has also been a growing outflow of mainland Chinese.

Wherever they are, the Chinese people maintain certain of their basic values - extended family ties, a strong work ethic, high saving habits, a desire to excel in education, and a sense of obligation to family and friends. These characteristics of the Chinese people are enduring, and maintained wherever they settle. The tenacity of Chinese culture is quite independent of the political system, which is one reason why the Chinese civilisation has lasted so long.

The industry of the Chinese, their natural bent for science and mathematics, and their ability to maintain strong networks across the oceans, position them for the knowledge-based economy of the 21st century. The growing prominence of Chinese scientists, software engineers and entrepreneurs in the high-tech areas on both sides of the Pacific is an indication of this trend.

While many features of the Chinese value system are well suited to the present-day economy, some are not. When an enterprise grows beyond a certain point its operations become more complicated. The willingness to recruit talent widely and to use them in trusted positions becomes essential if the enterprise is to stay relevant. But often, this need comes up against the fear that the founding family will lose control.

For the next century, it is important for Chinese-owned enterprises to break away from family control and be professionally run. This is particularly necessary in businesses which are complex and need to source internationally for talent. To develop world class enterprises in finance and high technology, professional managers must be given the latitude to decide how to respond to changing circumstances.

In Singapore, many of our most successful enterprises are government-linked like Singapore Airlines, Singapore Technologies, DBS (or Development Bank of Singapore), Sembawang and Keppel. Recruitment and promotion are entirely based on merit. And increasingly, they recruit internationally because we have to widen our talent pool. In recent months, we have instituted a series of reforms in the financial sector to separate family ownership from family control. This is to prepare our major banks for keener international competition as we open up Singapore's banking industry.

Now, making this transition from family control to professional control is not easy. It runs against deep cultural instincts. Chinese enterprises which are not able to make this leap will not be able to compete in the global market.

Another major Chinese challenge that Chinese entrepreneurs face is that of political loyalty. It is crucial for Chinese outside China to separate their political from their cultural selves. Thus, every two years when we gather at this convention, we meet as Chinese entrepreneurs and not as Chinese nationals. Of course, this is easier said than done because cultural emotions can sometime affect our political reactions. For example, the bombing of the Chinese embassy in Belgrade in May this year. Among Westerners, many assumed without the need for proof, that the bombing was an accident because there was no good reason why the US Government or NATO would want to bomb the Chinese embassy. Many Chinese, however, and indeed many East Asians, were sceptical that the bombing was the result of an old map being used. In Singapore, for instance, the Chinese-language newspapers expressed quite different views from the English-language newspapers. These different emotional pulls are a fact of life, and we must be aware of them.

When the Cox report alleging Chinese theft of US nuclear weapon secrets was released, many Chinese-Americans were outraged. They immediately detected a racial bias. US Energy Secretary Bill Richardson, himself a member of the Hispanic minority, took pains to assure Asian-Americans working in the department's nuclear laboratories that there would be no racial discrimination. He had to give this assurance because a significant proportion of the scientists in Los Alamos, the main laboratory for nuclear weapons research, are ethnic Chinese. Nevertheless, in an unprecedented move, scientists working in sensitive positions are now required to first go through lie-detector tests.

It is most important that Chinese who have migrated should give total political loyalty to their new homeland. In Southeast Asia, this is a historical process which has gone through many twists and turns since the Second World War. In Thailand today, a majority of Thai Members of Parliament are Sino-Thai. And in both Thailand and the Philippines, ethnic Chinese and indigenous people intermingle freely at all levels of society in both public and private sectors. Many inter-marry.

More and more Chinese are participating in local and national politics in Australasia, in North America and Latin America. As these Chinese communities strike deeper roots in their new homelands, there will be less discomfort when Chinese entrepreneurs co-operate across national boundaries in a globalised economy.

Finally, let me wish you a successful convention in Melbourne.

Thank you.