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

Figure 1.─ Eurodile (1)

 

Figure 2.─ Eurodile (2)

 

Figure 3.─ Eurodile (3)

 

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

Figure 4.─ ORT (1)

 

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.

Figure 5.─ ORT (2)

 

Figure 6.─ ORT (3)


 

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 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)

 

1998

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.

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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 7S 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

 

 

 



[1]     Thierry Pairault is Directeur de recherche (Research Professor) at the Centre National de la Recherche Scientifique; he is currently teaching at the École des Hautes Études en Sciences Sociales and at the Institut National des Langues et Civilisations Orientales.

[2]     裴天士 (Thierry Pairault) ,「法國地區華商與台商現況之探討」載《全球華人經濟力與發展國際學術研 討會論文集》,台北﹕中華經濟研究院,2000259-298頁。

[3]     Cf. Thierry Pairault , L’intégration silencieuse : la petite entreprise chinoise en France, Paris : L’Harmattan, 1995, p.24-27.

[4]     裴天士 (Thierry Pairault) 法國潮州籍華人概況」戴鄭良樹(主編),《潮州學國際研討會論文 集》,廣州,暨南大學出版社,1994年,頁1025-1048

[5]     Cf. Thierry Pairault, op. cit.

[6]     The official English translation of its name is the French “Patent Trademark Office”.

[7]     The address of the head office is 26bis rue de Saint Petersbourg (75008 Paris); there is twelve local offices, some information centres and other subsidiaries.

[8]     Its Web addresses are  http://www.inpi.fr for the main site and http://www.euridile.inpi.fr/ for the search site.

[9]     Its Web address is http://www.ort.fr.

[10]    Its Web address is http://www.societe.com.

[11]    In the early 1990s, two attempts were made:

        Ng Yok-Soon (éd.), Guide de la communauté chinoises en France, Paris: Éditions Les Cents Fleurs, 1991, 939 p.

      Yuan Guo’en (éd.), Longbao quanshu (= Le guide pratique des formalités et investissement), Paris: Bali Longbao chubanshe, 1991 (in chinese).

[12]    I am fully aware of the potential danger of such a method. The undeniable risk is that one governmental agency develops lists of surnames according which anyone could be classified as “White”, “Black”, “Chinese” or “Jew”. Recent European history as well as elsewhere history teach us that it is always the prelude to some ethnic cleansing. The very fact that US administration (as the Social Security Administration, the Census Bureau, the Department of Commerce...) have already developed such lists and codify “races” (sic) is really frightening (see The methodological presentation of the Survey of Minority-owned Business Enterprise (1992) http://www.census.gov/prod/2/bus/mob/mb92-4.pdf).

[13]    Stock company (Société anonyme: SA), limited laibility company (Société à responsabilité limitée: SARL), one man company (Entreprise unipersonnelle à responsabilité limitée: EURL)...

[14]    For example, a registration number may read as follows Paris A 321 654 987. It is made of two parts. One, called “numéro SIREN”, is made of nine digits (321 654 987); it is a unique number which is allocated by the French statistical bureau (INSEE). The other is made of the place of registration and a letter (“A” for an individual, “B” for a company). To retrieve an enterprise, users have only to type in the nine digits.

[15]    Wang being his surname and Ju his given name.

[16]    That is to say neither a “fast food” nor a “take-away”.

[17]    A town in the south of Alsace.

[18]    In 1996, no figure is given for 1998.

[19]    I picked up at random a Chinese book on my desk, it was written by an author whose surname was “Chen”.

[20]    The scions of the Tang family are refugees from Laos.

[21]    “Teochew” is a non standard but common transcription and appellation whereas “Chaozhou” is the pinyin transcription of the mandarin pronunciation.

[22]    As the Tang brothers are registered under their Laotian name “Rattanavan”, their undertakings fall outside the scope of this survey.

[23]    These “sociétés de moyens” are civil corporate bodies set up in order to deliver collective management services to individual professionals.

[24]    “Foreign companies” are those companies which have primarily registered in some foreign country and have set up a representative office in France which is de jure a non corporate body registered in France.

[25]    See Table 4: Textile manufacturing + Clothing manufacturing + Clothing wholesaling + Textile wholesaling + Textile brokers + Clothing retailing.

[26]    Its Web address is http://www.apce.com.

[29]    Which of course do include figures about “Chinese” businesses as well as those of other businesses registered in France.

[31]    This hypothesis I put forward one year ago has been verified by on the field investigations published in Ouzhou ribao 12 August 2000, p.6.

[33]    For the sake of convenience, I assume that spouses always work alongside with the owner whenever the number of employees does not exceed six.

[34]    As from the 1 of July 2000, a monthly wage calculated according to the legal minimum hourly wage rate (39 hours’ workweek) amounts to 7,101 francs (gross earnings) or to 6,055 francs (net earnings), see Agenda social at  http://www.leschemins-emploi.net/pages/actual/agenda.htm).