Entrepreneurs and Ethnicity: Economic Development in China's Northwest

Abstract

Under the ethnic affairs management regime established by the People’s Republic of China (PRC), every Chinese citizen is classified within one of fifty-six state-recognised ‘nationalities’. Government policy assumes that these nationalities differ from one another primarily in their levels of economic development, and asserts that ethnic divisions and identities fade with the gradual achievement of economic and social equality. As a result, economic development policy in minority nationality (i.e. non Han-Chinese) areas has often been applied as a replica of the model which has already proven successful in China’s Han-Chinese dominated east. This thesis engages with the assumptions that sustain this approach. Research conducted across five locations in China’s Northwest paints a far more complex picture. Interviews with entrepreneurs from minority and non-minority nationality backgrounds suggest that ethnic—and other—identities inform the nature of economic participation. The nature of entrepreneurs’ business motivations, selection of industry and products, customers and personnel differ markedly between minority and non-minorities nationalities. Similarly, the obstacles inhibiting economic engagement tend to reflect minority/non-minority divisions. Therefore, economic participation, even when successful in achieving its economic outcomes, may actually serve to reinforce and strengthen minority nationality identity—perhaps even at the expense of national Chinese identity. The capacity of the Chinese Government to achieve a transfer of loyalties among its minority nationalities, from the ethnic to the national is key to the country’s ongoing economic and political future. Enduring ethnic identities that run parallel or even contrary to national ones pose a legitimate challenge to the political stability of the PRC. As such, further research on a broader scale is needed on this topic to better assess the interrelationship between economic development and ethnic identity in China.