Chinese Business Enterprises in France
Thierry Pairault[1]
This paper is an outgrowth of a survey I
undertook last year (2000) to determine whether
Taiwanese entrepreneurs in France were behaving as Chinese entrepreneurs in
France usually do. The main results of that survey have already been presented
at an international conference on The
Economic Performance and Strength of Overseas Chinese in a Global Economy
held in Taipei on the 29-30 of September 2000; they also have
already been published[2]. The
current study will mainly focus on the method of data gathering. Before turning
to the methodology, I shall outline the background of the Chinese immigration
in France. When conclusion should be reached, I shall sum up the major findings
drawn from the gathered data.
Backgrounds of the Chinese immigration in France
Chinese immigration in France begins with the
inception of the just gone century (see Table 1). Till the fifth tide, Chinese
immigrants were not so numerous, consequently Chinese entrepreneurship was even
rarer. From 1975 to 1982 France catered for refugees
flooding out off former French Indochina (Vietnam, Cambodia, Laos). By the 1990's, such immigrants with Chinese
ancestry (including their offspring) might have been no less than 150,000[3] people, most of them claim to be
Teochew, i.e. of Chaozhou origin[4].
|
Table 1. – Tides of
Chinese immigration in France
|
|
1900-1913
|
|
•
Small pedlars from Wenzhou and Qingtian
|
|
•
The “half-study, half-work” movement
|
|
1914-1925
|
|
•
Chinese coolies during the First World War
|
|
•
The “half-study, half-work” movement
|
|
1926-1936 : Small pedlars from Wenzhou
and Qingtian
|
|
1955-1965 : Chinese refugees from Vietnam
|
|
1975-1982 : Chinese refugees from the
former French Indochina
|
|
1990's
|
|
•
Illegal immigrants from Wenzhou
|
|
•
Illegal immigrants from Dongbei
|
The sixth
tide of immigration is definitely different from the previous one for the very
reason that it is based on the smuggling of Chinese nationals (People’s
Republic of China). It is possible to distinguish two waves, the older and
largest one is due to Chinese immigrants of Wenzhou origin, the most recent one
is caused by Chinese immigrants from Dongbei (mostly xiagang, see infra).
Table 2 draws three patterns from the differences between the two waves of this
tide of immigration and the previous tide, namely the “Chaozhou pattern”, the
“Wenzhou pattern” and the “Dongbei pattern” according to the main local origin
of immigrants in each group. The so-called “Chaozhou” are refugees coming from
the former French Indochina; they migrated in the second half of the 1970s and in the early 1980s. They were followed by the
so-called “Wenzhou” all along the 1990s then by the “Dongbei” from 1998 onwards. The “Chaozhou” group is
made of grown-ups city-dwellers accompanied by their own children and some of
their elderly parents all fleeing to safety from a war-torn country. The
“Wenzhou” group is made of rather young people, 20 years old on average. The “Dongbei”
group is made of older migrants from about 30 to 40 years old. Unlike the “Wenzhou”,
often coming from rural areas, the “Dongbei” are blue collars, even white
collars, who have been working in State-owned enterprises till they were
laid-off (xiagang) for the sake of
the recomposition of the State sector. The “Chaozhou” migrants were forced to
leave their country which was in fact a host country for their own parents or
grandparents have emigrated from China to Vietnam, Cambodia or Laos; they did
not nor do expect any return even if they might start from nil if they go back.
Conversely, the “Wenzhou” and the “Dongbei” emigrants have deliberately left
their country to go and seek fortune elsewhere dreaming they will return home
once rich. The refugee’s status of the “Chaozhou” granted them a right of abode
in contrast to the “Wenzhou” and the “Dongbei” who are illegal immigrants
(taking advantage of the goodwill shown by the French government, many of them
have recently been able to regularise their situation). All of them have left
their country out of despair, so they all were penniless when arriving in
France ; nevertheless their respective financial standing is rather different.
The “Chaozhou” have lost everything, they have no funds to invest nor have they
any debts to pay off. In contrast, the “Wenzhou” have heavy debts to honour and
will be working as modern slaves to pay some “snakehead” back for smuggling
them into France. Even if the “Dongbei” have also been resorting to
“snakeheads”, they have often settled up their smuggling before leaving China;
furthermore, they might have some remaining funds which grant them with some
independence from their “well-intentioned” Chinese acquaintances greeting them
when arriving in France. As far as fluency in French is concerned, the
“Wenzhou” and the “Dongbei” do not know how to speak any French, but their
respective levels of educational attainment are quite dissimilar: the former
experience so low levels that some of them might be half-literate; the latter
do somewhat better for some of them were low or middle ranking executives
before emigrating. Because they were emigrating from a former French colony,
the “Chaozhou” were often able to speak French with some fluency; if not, they
were taught French enough to meet their basic needs when arriving in France.
Comparing these patterns, one have to understand that the respective attitude
of such immigrants towards their host country might be quite different: the
“Chaozhou” group might show more willingness to integrate into the French
community in contrast to the “Wenzhou” and the “Dongbei” who might shut
themselves in the Chinese community and might be heavily relying on their
Chinese compatriots to strive for a living.
This classification may seem to be a
rather simplistic assessment of the situation; I do not intend to describe in a
systematic way every specific situation. It reminds us that the economic
behaviour of immigrants is deeply affected by the very conditions of their
migration, therefore understanding their background is the necessary
precondition for making the most of the available databases.
|
Table 2 – Thirty years of
Chinese immigration to France: patterns
|
|
|
The Chaozhou
pattern
|
The Wenzhou
pattern
|
The Dongbei
pattern
|
|
place of origin
|
Former French
Indochina
|
Zhejiang province
|
Dongbei
|
|
date of arrival
|
1970's and 1980's
|
1990's
|
from 1998 onwards
|
|
age at arrival
|
any age
|
young people of
about 20
|
people from about 30 to 40
|
|
grounds for
emigrating
|
forced emigration
|
deliberate
emigration
|
deliberate
emigration
|
|
expectations
|
no return expected
|
return when “rich”
|
return when “rich”
|
|
right of abode
|
yes (refugees...)
|
no (stowaways...)
|
no (stowaways...)
|
|
available funds
|
no assets
|
no assets
|
some assets
|
|
no liabilities
|
heavy liabilities
|
no liabilities
|
|
fluency in French
|
some
|
none
|
none
|
|
original dwelling
|
city-dwellers
|
rural dwellers
|
city-dwellers
|
Gathering data from the Register of Commerce and Trade
In the early 1990s, I surveyed a hundred of Chinese
small business entrepreneurs in Paris; my findings have been published in L’intégration silencieuse : la petite
entreprise chinoise en France[5]. Such a survey is a heavy operation which
allows one to understand their motives for jumping into entrepreneurship but
fails to minutely scrutinise the actual situation of these small businesses.
That is why I decided to survey Chinese business enterprise characteristics
through the data available from the INPI (Institut national de la propriété
industrielle, i.e. word for word the
National Institute for Industrial Property, such an appellation puts the
emphasis on one of its tasks but de facto
conceals other tasks[6]).
INPI is an administrative
establishment created in 1951, it is currently under the French
Ministry of Finances. INPI is inter alia
in charge of the Registre national du commerce et des sociétés (RCS, i.e. the French Register of Commerce and
Trade), as such it is a leading supplier of business-critical information. INPI
databases are available on-line through various web sites; some of which
provide gratis administrative documentation, legal information, year-end
accounts, search aid on businesses legally settled in France. In 1999, INPI had registered about two
million deeds and a half of which 270,500 were registrations of business
start-ups. Over a period of five years from 1995 to 1999, it is almost one million and a
half of new enterprises which had registered and more than one million which
had been remove from the register, ex
toto there is only 500,000 survivors. Every year some 700,000 companies (i.e. corporate bodies in contrast to the sole proprietorship or
individual) register their year-end accounts as ruled by law.
This kind of data warehousing is
certainly the best way to ensure a good preservation of such basic documents and accountings records and,
at the same time, to manage a public access to them. Users may go the head
office of the INPI[7] and
look up the Register of Commerce and Trade on the shelf. Users may scan for
information through a videotext terminal (Minitel) if dialling 3617 Euridile.
From June 1999 onwards these data became available for
consultation through several dynamic web sites. The data warehoused by these
web sites allow users to go through some three million and a half of analytical
entries. At the INPI web site[8],
accessing to the basic documentation is free of charge; for further and more
detailed information users have to pay some fees. It recently appeared that
eligibility of non commercial users to scan freely on this web site has
drastically been restricted to the most basic information. The same information
is available on other web sites managed by two companies dedicated to business
and credit information. One web site is managed by ORT (now a company of the
Reuters group) which is a public information management service concession
(original French wording: concession de service public pour la gestion
d’informations)[9]; the
other one is controlled by Société SA[10].
These three databases give some information free of charge and bill users for
more specific information. The important fact is that the scope and the kind of
free information vary according each web site. Before going on describing these
web sites, there is two methodological features I should clarify first.
Ø To
enter a query into these three web sites, the user has just to type in a few
descriptive words and hit the search button for a list of relevant enterprises.
Descriptive words might be part of a firm name, a trade name, an address, a
patronymic (the one of an entrepreneur, of a manager, of a partner, of a
licensee, of a shareholder...). As there is neither almanac nor business directory
drawing an accurate list of Chinese business enterprises in France (even if
restricted to Paris)[11], so it
is impossible to systematically type in names of firm, addresses and so on to
retrieve rather comprehensive information about listed Chinese businesses. A
wildcard is to take advantage of a Chinese peculiarity, namely the small number
of Chinese surname in spite of their various phonetic transcriptions. I have
largely resorted to this feature as I shall explain it later[12].
Ù Business
enterprises registered in the French Register of Commerce and Trade are of
various kinds. The term “business enterprises” refers to companies[13], sole proprietorships, partnerships,
professionals associations and any other individuals or organisations
producing, wholesaling or retailing goods and services on a commercial ground.
The legal duties of any business enterprise vary with its juridical status:
only companies (it does not matter how small or big) have to produce year-end
accounts for registration at the Register of Commerce and Trade, in other
words, a survey aiming at understanding the financial situation of a sample of
Chinese business enterprises, has to limit itself to companies. Conversely,
every company is not necessarily a commercial one as the so-called “Société
civile immobilière” (SCI) which is a real estate civil company (most often a
one-man company as far as Chinese entrepreneurs are concerned). Such civil
company is an independent corporate body dedicated to manage industrial and
commercial premises outside of the main commercial company: e.g. an “EURL Délices de Pékin” (a
limited liability one-man company named “Peking Delicacies”) goes along with a
“SCI Délices de Pékin” (a real estate civil company named “Peking Delicacies”),
the former is a restaurant paying rent for premises owned by the latter. The
purpose of this set-up is to keep the real estate owned by the entrepreneur
safe from the demands of creditors of his/her undertaking; it has often become
a tool to embezzle in custodia legis
the commercial company’s operating profit by setting rent at a level much
higher than the standard.
Gathering data on the INPI web site (EURIDILE)
To enter a query into Euridile,
users just type in descriptive words or identifiers such as the registration
number of an enterprise[14], or
its name, or the surname of its manager, director..., a trademark, an address.
Users may narrow or broaden the search by specifying whether the answer should
exactly match the descriptive words and whether it should include each word. For
the sake of clarity, I chose to type in the patronymic “Wang” (see Figure 1). Users are prompted that there is 554 findings of which (see Figure 2):
• 168 are relative to names of
enterprises
• 344 are relative to surnames of
managers
• 24 are relative to surnames of
directors
• 12 are relative to corporate real
estate owners (as registered in the cadastral register)
• 6 are relative to trademarks
Before listing the answers, users may ask for a smaller subset of
findings by specifying one or more of the following categories: the district of
registration, the sector of activity, the legal form, the executive position.
In the list of managers, I picked up one enterprise whose manager is called
Wang Ju[15] (see
Figure 3). One may read that his/her business is a standard restaurant[16]
settled in the 15th arrondissement of Paris. Its legal
form is that of a limited liability company. In fact, Wang Ju has been given
power of attorney to wind up this restaurant; according to the French
commercial law, such a liquidator is chosen by the partners (or by the court
with their agreement) among themselves. Up to this point, searching within the
Euridile database is no longer free of charge, users have to pay for examining
year-end accounts and other legal instruments. Even if the scope of the
information is rather limited, the researcher may undertake some statistical
work about the spatial distribution of the Chinese business enterprises, their
sectors of activity, their legal form...
Gathering data on the ORT web site
Searching methods are very similar
to those of the previous database; it is also possible to refine the search
(see Figure 4). Users are prompted the same way as
previously but, due to classifying method and database scope (e.g. civil corporate real estate owners
are excluded...), the number of findings is different, 211 instead of 544 answers. The listing (see Figure 5) makes a further distinction
between companies and individuals:
• 170 companies
• 41 individuals among whom
-
10 craftsmen
-
19 liberal professionals
- 2 farmers
- 10 executives of associations and
other incorporated societies
Now displaying information about the
Tahwei company mentioned above (see
Figure 6), one may read some new facts which were
previously unavailable: the commercial name of this company is Le Palais Wang (Wang’s Palace), its
invested capital amounts to 200,000 French Francs (i.e. 30,500 € or 27,400 $), its date of first registration
is 1 January 1976, there is only one working place. Up to this point,
searching within the ORT database is no longer free of charge, nevertheless non
paying users have gathered some more information.
Gathering data on the Societe.com web site
The searching method of this third
database is almost identical to the two previous ones even if its general
appearance is rather different: the web site distinguishes between “ordinary
search” and “advanced search”. The former is made of two boxes (the two upper
boxes of figure 7) which appears on the home page of the web
site, the latter is also made of two boxes (the two lower boxes of figure 7) which appears when the “advanced
search” button is hit. A list of relevant enterprises then shows up (see Figure
8): 318 findings for the descriptive word “wang” typed
in as the manager’s surname. This figure includes all corporate entities and
excludes all individuals; due to methodological discrepancies in data
warehousing, this figure and previous ones do not overlap quite exactly. For example,
the Euridile database lists a man called Wang
Pintchéon, he is said to be a bricklayer living in Paris and having registered
his small business in 1990. According to the Societe.com
database, from 1994 onwards such a man has been the manager of a restaurant
called “Double Bonheur” registered in Mulhouse[17]
in 1993. The Euridile database does have a file for such a restaurant but the
name of the manager is not displayed. Glancing at the telephone directory
proves that no bricklayer is any longer based at the 11bis rue du Colisée in Paris. Without
paying fees, it is impossible to trace back a possible link between the two
pieces of information. But what is new in the Societe.com database about Wang
Ju and “Le palais Wang”?
|
Figure 7.─ Societe.com
(1)
|
|
|
Firstly, this third database bears
out what we already know, in addition it shows that (see Figure 9):
• the turnover in 1998 amounted to 625,989 French Francs (i.e. 95,431 € or 85,640 $),
• the average number of workers was
three[18],
• Wang Ju is born on 26 May 1914,
• the dissolution of the company
has been decided on 11 January 2000 after five years of undertaking by the current owners.
|
Figure 8.─ Societe.com
(2)
|
|
|
The most interesting feature of this
database is certainly the possibility of looking at year-end accounts of
retrieved companies provided that their managers have passed their books on as
they are supposedly bound to do so by law. The restaurant I am investigating
for example sake did pass them on for the three years 1995, 1996 and 1998; figure 10 gives the basic 1998's financial data which may be
looked at for free. I shall not comment these figures but remark that bank
overdrafts alone cannot be refunded even if selling the remaining capital; no
wonder that it had to be wound up.
It is possible to freely print
identification records such as in figure 9 or year-end accounts such as in
Figure 10 (users have to hit the printer at the lower
left or right corner), but it needs some skill to download and save the file
then to retrieve every item for word or data processing.
Gathering data about 521
Chinese business enterprises
In June 2000, when I undertook a survey of the
Chinese business enterprises in France, I randomly chose the patronymic “Chen”
as search criterion[19]. Thus
I have been granted with a list of 830 businesses which manager’s surname
or director’s surname was “Chen”. Then I realise that doing so I did exclude
from the scope of my survey any manager and any director whose surname written
in Chinese character 陳 was not necessarily transcribed “Chen”. Chinese names
and surnames may received various transcriptions in western languages according
to the dialect of the speaker firstly, and to the phonetic transcription system
secondly. Searching for manager and director all called “Chen” but variously
transcribed (see Table 3) produces 3,767 answers. This
impressively high figure does not exhaust the potential findings whatsoever.
Moreover some people known in France as “Tang”, would be known, according to
the pinyin transcription system used
in PRC, as “Tang”, “Deng”... or “Chen”. For example the well-known mass retailing business “Tang Frères” (i.e. Tang Bros): these brothers are
registered by the French Registry of civil status as “Rattanavan” (their
surname in Laotian[20]), are
known as “Tang” by ordinary French people as well as Chinese people speaking
the Teochew (Chaozhou)[21]
dialect and are called “Chen” by Chinese people speaking mandarin.
|
Figure 9.─ Societe.com
(3)
|
|
|
|
Figure 10.─ Societe.com
(4)
|
|
|
Back to the sampling of
Chinese businesses, if the Tangs were to be added to the Chens, the sample
should have been quite large: 4,105 business enterprises, therefore I
decided that the sampling should be restricted to those Chens whose surname was
written “c,h,e,n” and to the Tangs[22]. Once rejected individual
businesses (i.e. sole
proprietorship), real estate civil companies (SCI) and other inappropriate
corporate entities as nominal partnerships[23], foreign companies[24]...,
there are still 521 businesses enterprises
left which became then my survey sample.
|
Table 3. – Make_up of the
sample
|
|
|
Businesses
registered in the RCS
|
of which
|
Sample
|
Companies
|
Individuals
|
|
• The Chens
|
3767
|
3237
|
530
|
399
|
|
- Chen
|
830
|
776
|
54
|
399
|
|
- Chan
|
821
|
719
|
102
|
---
|
|
- Kam
|
160
|
141
|
19
|
---
|
|
- Rattanavan
|
20
|
20
|
---
|
---
|
|
- Sengmany
|
17
|
16
|
1
|
---
|
|
- Tchen
|
35
|
32
|
3
|
---
|
|
- Tran
|
1884
|
1533
|
351
|
---
|
|
• The Tangs
|
338
|
309
|
29
|
122
|
|
Total
|
4105
|
3546
|
559
|
521
|
521 Chinese business enterprises and their industry
As depicted in Table 4, the structure by
industry of the 521 Chinese business
enterprises shows that most of the surveyed businesses – 221 enterprises, that is 43.3% of all enterprises —
come within the trade sector (strictly speaking) just before the services
sector – 190 enterprises, that is 37.3% of all enterprises.
The manufacturing sector only reaches 98 enterprises, that is 19.2% of all enterprises,
which is far over the agricultural sector – 2 enterprises, that is 0.4% of all enterprises. As
far as sub-sectors are concerned, establishments providing food services to
patrons (full-service restaurants, fast food restaurants and take-away
restaurants) account for the larger sub-sector (132 enterprises, that is 25.9% of all enterprises),
then come the manufacturing of clothing (62 enterprises, that is 12.2% of all enterprises)
which is only a little higher than the wholesaling of clothing (58 enterprises, that is 11.4% of all enterprises);
all other sub-sectors do not go over 5% of all enterprises.
If sub-sectors are to be
added according to the end-product of a manufacturing and trading process,
clothes rank at the top of the list (32.0% of all enterprises[25]),
followed by catering
Tableau
4. – Classification of 521 business enterprises by industry
|
|
industry
number
of businesses
|
absolute figures
|
gross relative figures
|
net
relative figures
|
|
Agriculture,
Forestry, Fishing...
|
2
|
0,4%
|
0,4%
|
|
Manufacturing,
Mining, Extraction...
|
98
|
18,8%
|
19,2%
|
|
|
Producer’s
goods
|
4
|
0,8%
|
0,8%
|
|
|
|
Glass
product manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
|
Electronic
product manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
|
Transportation
equipment manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
|
Precision
turned products manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
Consumer’s
goods
|
94
|
18,0%
|
18,4%
|
|
|
|
Textile
products manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
|
Leather
clothing manufacturing
|
23
|
4,4%
|
4,5%
|
|
|
|
Footwear
manufacturing
|
1
|
0,2%
|
0,2%
|
|
|
|
Clothing
manufacturing
|
62
|
11,9%
|
12,2%
|
|
|
|
Furniture
manufacturing
|
3
|
0,6%
|
0,6%
|
|
|
|
Printing,
publishing...
|
3
|
0,6%
|
0,6%
|
|
|
|
Other
consumer’s goods manufacturing
|
1
|
0,2%
|
0,2%
|
Trade
|
221
|
42,4%
|
43,3%
|
|
|
Wholesale
trade
|
129
|
24,8%
|
25,3%
|
|
|
|
Food
wholesaling
|
3
|
0,6%
|
0,6%
|
|
|
|
Clothing
wholesaling
|
58
|
11,1%
|
11,4%
|
|
|
|
Textile
wholesaling
|
8
|
1,5%
|
1,6%
|
|
|
|
Electronic
equipment wholesaling
|
16
|
3,1%
|
3,1%
|
|
|
|
Other
producer’s goods wholesaling
|
9
|
1,7%
|
1,8%
|
|
|
|
Other
consumer’s goods wholesaling
|
35
|
6,7%
|
6,9%
|
|
|
Wholesale
brokering
|
11
|
2,1%
|
2,2%
|
|
|
|
Textile,
clothing and footwear brokering
|
3
|
0,6%
|
0,6%
|
|
|
|
Other
brokering
|
8
|
1,5%
|
1,6%
|
|
|
Retail
trade
|
81
|
15,5%
|
15,9%
|
|
|
|
Food
and beverage products retailing
|
17
|
3,3%
|
3,3%
|
|
|
|
Clothing
retailing
|
12
|
2,3%
|
2,4%
|
|
|
|
Leather
clothing retailing
|
19
|
3,6%
|
3,7%
|
|
|
|
Other
speciality retailing
|
20
|
3,8%
|
3,9%
|
|
|
|
Other
retailing
|
13
|
2,5%
|
2,5%
|
Services
|
190
|
36,5%
|
37,3%
|
|
|
Accommodation
and food services
|
132
|
25,3%
|
25,9%
|
|
|
Marketed
services for producers
|
23
|
4,4%
|
4,5%
|
|
|
|
Management
and technical consulting services
|
21
|
4,0%
|
4,1%
|
|
|
|
Other
services
|
2
|
0,4%
|
0,4%
|
|
|
Marketed
services for consumers
|
12
|
2,3%
|
2,4%
|
|
|
|
Repair
and maintenance
|
2
|
0,4%
|
0,4%
|
|
|
|
Healthcare
|
5
|
1,0%
|
1,0%
|
|
|
|
Education,
entertainment and recreation
|
3
|
0,6%
|
0,6%
|
|
|
|
Other
services
|
2
|
0,4%
|
0,4%
|
|
|
Transportation
|
8
|
1,5%
|
1,6%
|
|
|
|
Road
transportation
|
4
|
0,8%
|
0,8%
|
|
|
|
Support
activities and travel agencies
|
4
|
0,8%
|
0,8%
|
|
|
Real
estate, rental and leasing
|
9
|
1,7%
|
1,8%
|
|
|
Finance
and insurance
|
6
|
1,2%
|
1,2%
|
Indeterminate industry
|
10
|
1,9%
|
---
|
|
|
|
Total
|
521
|
100,0%
|
100,0%
|
services (25.9%) then by leather goods
(8.4%). These three end-products alone
are relevant to more than the two-thirds of the 521 surveyed enterprises.
To non-economists, the
words “trade”, “business” ... are rather vague and all-embracing, taken in
their broadest sense, they include trade itself as well as services and craft
industry. From this point of view, those Chinese entrepreneurs “doing business”
account for the three quarters of all the entrepreneurs. This “specialisation”,
specific to the confinement of the Chinese community in a few economic
activities, results not from some supposedly cultural aptitude but from purely
financial and technical considerations.
521 Chinese business enterprises and their initial investment
The structure by
industry seen above shows that Chinese business undertakings as a rule are not
capital spending. More than the three quarters (77%) of the companies
registered by the 521 business enterprises
have needed an initial capital of 50,000 francs (i.e. 7,600 € or 6,800 $),
in other words these undertakings start up with a level of capital which the
minimum initial capital as required by French law (see figure 11). Data published by the
Agence pour la création d’entreprises
(APCE, which is an agency to promote the starting up of new businesses, is an
administrative establishment launched twenty years ago and currently under the
French deputy minister in charge of the medium and small business)[26]
emphasise the extremely low level of initial capital invested par ethnic
Chinese in France. As to 1998, about 60% of all newly started
up businesses had an initial capital of more than the legal minimum level and 10% had invested at least 250,000 francs (i.e. 38,100 € or 34,000 $)[27]. The survey launched by
APCE is concerning companies as well as individuals, therefore if companies
only were surveyed, figures might have shown an even more drastic difference
with ethnic Chinese businesses.
|
Figure 11.─ Invested
capital by amount (1)
|
|
|
From February 1999 to September 1999, the APCE undertook
another survey, its main concern was with the smallest newly started up
businesses, that is to say with an initial capital
class=Section2>
lower than 250,000 francs (i.e. 38,100 € or 34,000 $)[28]. Data show that 53.9% of all surveyed
companies have made an initial global investment (registered capital stock plus
working capital) amounting to less than 75,000 francs (i.e. 11,400 € or 10,200 $). As the Register of
Commerce and Trade do not show any data on initial working capital of the 521 business enterprises, I
shall assume as a hypothesis that companies having a registered capital stock
of 50,000 Francs are those
spending no more than 75,000 francs as initial global investment,
if so, that is 85% of the “smallest”
(having registered a capital stock lower than 250,000 francs) which have an
initial investment lower than 75,000 francs, a proportion dramatically
higher than the French national average (thirty points of percentage). Chinese
business enterprises in France are very small undertakings, far smaller than
the average smallest ones.
Such a small size is
again underscored by the evolution of the average initial capital as seen in
figure 12. If business
enterprises were started up before 1990 (12% of the 521 business enterprises),
the average initial capital amounted to 465,000 francs (i.e. 70,900 € or 63,200 $), if started up
between 1990 and 1994 (31% of the 521 business enterprises),
it amounted to 228,000 francs (i.e. 34,800 € or 31,000 $), and if started up
between 1995 and June 2000 (57% of the 521 business enterprises),
it fell at 87,000 francs (i.e. 13,250 € or 11,800 $). This drastic fall,
especially significant after 1994, needs further
explanations.
|
Figure 12.─ Invested
capital by amount (2)
|
|
|
521 Chinese business enterprises, their setting up date and industry
Among these 521 business enterprises,
the older one was established in 1972. During the first
half-year of last year (2000), there are 59 newly set businesses.
Supposing that the second half-year has been as fruitful as the previous one,
new Chinese business enterprises set up during the whole year should amount to 118. Consequently, it
appears that one half of all enterprises has been set up before 1998, and a second half has
been established during the three years 1998, 1999 and 2000. As for year 2000, newly established
companies account for one fifth of all surveyed companies (see figure 13).
|
Figure 13.─ Cumulative
distribution by dates
|
|
|
Among the 59 new Chinese businesses
set up during the first half-year 2000, there are 37 businesses which are
related to clothes wholesaling and retailing; in other words, about the
two-thirds of undertakings among these the newly established enterprises are
relevant to one “industry”. On the other hand, catering services experience a
clear decrease in the part they might play in the economy of the Chinese
community in France (see table 5).
|
Tableau 5. –
Choice between industries
(by end-product)
|
|
|
|
1999
|
2000
|
|
Clothing
|
21%
|
40%
|
63%
|
|
Catering
|
23%
|
23%0
|
11%
|
|
|
|
|
|
|
Total
|
100%
|
100%
|
100%
|
Whatever is the evolution
underlying these figures, one should note that they point out a striking
contrast with the French national average[29] as shown by statistical
data drawn from an APCE survey (see table 6)[30]. The characteristics of the choice of an
industry by Chinese entrepreneurs in France is highly significant – either from
an economist point of view or from a sociologist point of view – for nearly an
half (43.7%) of all newly set up
businesses in France are in sector of industry almost un-chosen by residents of
Chinese origin (2.7%). Very clearly, it is
their migrants status and not some ethnic “fate” which drive them to select
those industries which precisely suit
low levels of basic education, need no fluency in French, require no specific
technical and management skills, and are low capital spending. Conversely, the
average new undertakings in France are set up in sectors which do not need to
dirty oneself (services to producers and to consumers, catering services
excluded) but which require a better level of basic education as well as a
higher initial investment. In addition, one should note that the French
government had recently made registration of new businesses a lot easier, had
allowed the regularisation of a myriad of stowaways living in France... all
these factors may explain a leap forward into entrepreneurship taken by Chinese
immigrants mainly those of Wenzhou origin[31].
|
Table 6. –
Choice of an industry
(APCE classification)
|
|
|
521 Chinese businesses
|
national average
|
|
Retailing
|
13,8%
|
8,3%
|
|
Wholesaling
|
34,1%
|
4,9%
|
|
Services to producers
|
4,6%
|
19,5%
|
|
Services to consumers
|
1,4%
|
15,2%
|
|
Full-service restaurants
|
9,2%
|
4,9%
|
|
Fast food restaurants
|
11,1%
|
2,7%
|
|
Clothes manufacturing
|
23,0%
|
0,7%
|
|
Other industries
|
2,7%
|
43,7%
|
|
Total
|
100,0%
|
100,0%
|
521 Chinese business enterprises and their life-span
It is rather difficult
to assess the life-span of these undertakings for their sales and take-overs
are not easily traced through the data freely available. Through an other
survey run in 1997 to study businesses
launched during the first six months of 1994, the APCE identifies
four factors which might affect the life-span of such enterprises[32]. First
of all, it clearly appears that businesses taken over from their previous owner
have a life expectancy of twenty points of percentage higher than those set up ex nihilo. This fact shed some light on
what small business entrepreneurship is made of, succes is not due to any
supposedly “entrepreneurial” skills but results foremost from the very
environment of the undertaking itself. The ability to borrow from a bank is
another factor which proves the confidence of a third party in the
entrepreneurial project as well as in the entrepreneur’s skills. As immigrants
entrepreneurs often have little fluency in French and little understanding of
the rules of their host country, it is rather difficult for them to convince
some banker of the appropriateness of their undertakings. The amount of the
invested capital is a third factor, the perenniality line (i.e. the point beyond which the life expectancy drastically
increases) is about 100,000 francs (i.e. 15,200 € or 13,600 $). As shown above,
most of the 521 business enterprises
are far under this point. The last factor is the business itself; the easiest
it is to start it up, the more numerous the competitors are and the lower the
life expectancy is. This situation is fully illustrated by the clothing and the
wholesaling businesses in which 70% of the undertakings do
not last more than five years. These two industries are precisely those most
favoured by Chinese immigrants of Wenzhou origin, therefore it should come as
no surprise that the life expectancy of their undertakings is rather low.
Among the 521 business enterprises, the oldest one has been set up 28
years ago, it is a traditional Chinese restaurant located in Saint Denis de la
Réunion (capital of Reunion Island in the western Indian Ocean). There are 153
businesses which are over five years old, 67 which are
over ten years old, 15 which are over fifteen years old. There are 79
businesses which have experienced a judiciary rather than a voluntary
winding-up, that is to say a little more than a quarter (25.1%) of the surveyed businesses excluding those newly set up. Half of
the bankrupted enterprises have been doing business for three years and a half
at the most, 70% for five years and a half at the most.
521 Chinese business enterprises
and their employees
|
Figure 14.─ Number
of registered workers
|
|
|
Three categories of
workers should be distinguished: the owner himself or herself, his/her relatives
(mainly his/her spouse, incidentally his/her ascendants and his/her offspring),
his/her employees (their earnings being or not declared). Among the 521 business enterprises,
there are only 169 enterprises which
disclose relevant data, workers might be estimated at 1,008 persons: 169 owners (16.8% of all workers), 129 spouses (12.8%)[33] and 710 registered employees (70.4%). On average, each enterprise employs 5.9 people (wage-earning
and non-wage-earning workers) or 4.1 registered workers
(full-time and part-time workers are taken together as it is impossible to
identify them). These figures should not conceal that most businesses are very
small ones as shown by Figure 14. A third of all
enterprises is giving work to less than two registered workers, that is to say
they are employing no more than 1.7% of all the registered
workers. On the contrary, 7.7% of all enterprises are
giving work to more than ten registered workers, that is to say they are
employing about half (44.7%) of all registered
workers in the surveyed businesses.
Among the 521 business enterprises,
the one which gives work to the biggest number of workers is currently
employing 89 people. There is seven
enterprises which are employing more than 25 workers, of which five
are joint-ventures between Chinese immigrants and native French people. The
biggest is a woodwork shop (89 employees,
joint-venture with native French people), the second biggest is a bicycle
assembly shop (50 employees,
joint-venture with native French people), the third is a data processing firm (33 employees), the fourth
is a transport company (30 employees,
joint-venture with native French people, bankrupt firm), a computer hardware
company (29 employees,
joint-venture with native French people, bankrupt firm), a consumer goods
wholesaling company 24 employees), one medical
laboratory (21 employees,
joint-venture with native French people).
521 Chinese business enterprises, their sales and
earnings
Among the 521 business enterprises,
there are only 161 enterprises which
disclose rather exhaustive year-end accounts and up-to-date data. On average,
their turnover is about 4,422,000 francs (i.e. 674,100 € or 598,700 $), their net income is
about 76,000 francs (i.e. 11,600 € or 10,300 $). Should this last
figure represent the share to be given to the entrepreneur as his/her income,
it would mean that his/her monthly average remuneration amounted to 6,000 francs (i.e. 915 € or 812 $), in other words a
sum equalling the legal minimum wage (SMIC) calculated on a monthly basis[34].
Actually, the entrepreneur’s remuneration is not limited to a share in profits,
as a rule a small entrepreneur and/or his (or her) spouse is (or are) often the
salaried employees (legal minimum wage rate) of their own business. Moreover, a
general characteristic of such small businesses is that they mix their business
running cost up with their own family expenditures, business operator’s
expenses up with consumer’s expenses, therefore their business profitability
will often result from their family consumption.
The data I have gathered
show a U-shaped distribution (see figure 15): a great number of
businesses making small profits or small losses, a few businesses achieving big
profits or big losses ; more than a third (34.5%) of all the
enterprises experiences operating losses. A first quarter (25.8%) makes losses of more
than 20,000 francs (i.e. 3,050 € or 2,700 $), the business which
losses are the heaviest amount to 3,926,000 francs (i.e. 598,500 € or 531,500 $). A second quarter (25.8%) has a between -20,000 francs (losses) and +20,000 francs (profits). A
third quarter (22.0%) makes a profit between
20,000 francs and 100,000 francs (i.e. 15,250 € or 13,500 $).
A fourth quarter (26.4%) makes a profit higher
than 100,000 francs, the highest
amounting to 4,032,000 francs (i.e. 614,700 € or 545,900 $).
|
Figure 15.─ Losses
and profits
|
|
|
Chinese small
businessmen often need a frontman to start up their business; it is standard
practice to pay a frontman a monthly fee between 2,000 francs and 4,000 francs. Collected
information on that matter is shown in table 7. The actual name of
each frontman has been disguised. Of course every frontman is named Chen since it is how the entrepreneurs
of my sample were selected. Their given name is made of an initial particle
prefixing given names (A) followed by
a Celestial Stem in regular order beginning with the first.
Among the 521 business enterprises, 79 had to turn to a
frontman. Frontmen are easily recognisable; they are elderly people (the most
active one is 77 years old!) who involve
themselves in several businesses. These enterprises in turn share three characteristics:
first, a low level of initial capital (94% have invested 50,000 francs i.e. the minimum initial capital);
second, the newness of their setting-up
(90% do not exceed three years old at
the very most); third, their industry is restricted to the clothes industry (90% are manufacturing,
wholesaling or retailing textile or leather clothes). Should one remark that
these businesses have all been set up in Paris on the borders of the 3rd, 10th and 11th arrondissements, one
would draw the conclusion that these businesses are those of recent and
ill-integrated immigrants of Wenzhou origin.
eee
It does not matter
whether an immigrant has a Chinese origin or not. To start up a business,
during such a gloomy economic situation with the constant dread of
unemployment, clearly shows that creating work for oneself is the unique
substitute, not so much for some low wage-earning employment, but for
unemployment – if not for communitarian slavery. A small family business is by
itself a way to minimise operating risks, almost like a small agricultural
exploitation. It guarantees some minimal income but does not preclude the
expansion of business. It is based upon family labour force, the only one which
might produce an immediate and costless response to a sudden upsurge in
purchase orders. It does not impede some sideline undertakings (not necessarily
moonlighting) during slack periods... Hard working and frugal living is not
showing some talent for entrepreneurship but expressing a dread of unemployment
and a strong desire for a subsistence
income.
|
Tableau 7. S Frontmen et their «empires»
|
|
|
total
|
per cent
|
number of enterprises which are
registered by a frontman
|
|
Chen Ajia
|
Chen Ayi
|
Chen Abing
|
Chen Ading
|
Chen Awu
|
Chen Ayi
|
Chen Ageng
|
Chen Axin
|
Chen Aren
|
|
Number of relevant enterprises
|
79
|
100
|
18
|
14
|
9
|
9
|
8
|
7
|
6
|
4
|
4
|
|
Industry by end-product
|
|
|
|
|
|
|
|
|
|
|
|
|
• catering
|
4
|
5
|
|
|
|
2
|
|
1
|
|
|
1
|
|
• clothing
|
71
|
90
|
17
|
13
|
9
|
6
|
7
|
6
|
6
|
4
|
3
|
|
• other
|
4
|
5
|
1
|
1
|
|
1
|
1
|
|
|
|
|
|
Date of setting up
|
|
|
|
|
|
|
|
|
|
|
|
|
• 2000
|
32
|
41
|
5
|
4
|
5
|
6
|
3
|
3
|
2
|
1
|
3
|
|
• 1999
|
24
|
31
|
4
|
5
|
|
2
|
2
|
3
|
4
|
3
|
1
|
|
• 1998
|
14
|
18
|
6
|
2
|
3
|
1
|
2
|
|
|
|
|
|
• before 1998
|
9
|
10
|
3
|
3
|
1
|
|
1
|
1
|
|
|
|
|
Registered capital
|
|
|
|
|
|
|
|
|
|
|
|
|
• 50,000 francs
|
74
|
94
|
18
|
14
|
6
|
9
|
7
|
7
|
5
|
4
|
4
|
|
• more than 50,000 francs
|
5
|
6
|
|
|
3
|
|
1
|
|
1
|
|
|