Economics Essay


Topic 1

European political expansion in Southeast Asia in the late nineteenth century provided the conditions for major economic transformations in the region. Southeast Asian states were subsequently integrated into the globalized system of production, trade, and investment.
Explain the processes of economic change in ONE Southeast Asian state between 1870-1940.


Topic 2: The role played by Chinese migrant labor in the development of the tin industry in Malaysia during the period 1890-1940

Between 1890 and 1940, thousands of Chinese emigrants moved into various countries of Southeast Asia. One of their destination countries was Malaysia. This wave of emigration was spurred by factors such as civil war, the Taiping Rebellion, Western influences, and general overpopulation. The rich tin deposits of Malaysia also greatly attracted Chinese immigrants. Although tin mining had been a traditional Malaysian phenomenon, it is only after the 1850s that the industry was properly organized. This proper organization was necessitated by the discovery of large tin deposits in the country.

Prior to the discovery of tin deposits in areas such as Kinta Valley, Larut, and Selangor, direct tin exports had generally been prohibited in Malaysia (Yah, 1967). Since 1895, arrangements were made between Malay rulers and Straits Merchants for permission to be granted on mining of tin in large-scale for export. The main condition for this agreement was that Malay rulers would start accruing taxes and tributes upon the privately operated mines, which were predominantly owned by Chinese immigrants. Apart from taking over ownership of many mines, Chinese immigrants provided much-needed labor in the tin industry between 1890 and 1940.

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            The rise of the Malaysian industry would not have occurred without the participation of Chinese immigrants. At the same time, the British administration was busy establishing direct colonial rule as well as spheres of influence in Malaysia. The British rule led to the stratification of the country’s economy. In this context, the peasant class was restricted to subsistence farming. The immigrant class brought in the laborers in China. These laborers operated in a business arrangement that appeared like a cooperative society. This mode of operation was necessitated by the need to derive maximum economic benefits in a challenging business environment. Then there was an upper class comprising of indigenous chieftaincies whose work as collecting taxes and tributes from tin mining companies.

            The influx of Chinese immigrants in Malaysia was both timely and opportunistic. This migrant labor brought about three main benefits; namely cheap and competitive labor, transfer of knowledge on best practices in mining, and the shallow mining practices. Chinese migrant labor was not only cheap but also highly competitive. During the recruitment system, the Credit-Ticket system was used. This system ensured that there was a constant flow of new immigrants. These immigrants were brokered to prospective employers. Another system was the Hun system, whereby remuneration in the form of a tribute was provided. This tribute tended to vary depending on the extent of the success of the tin mining venture. However, the Hun system had been banned by 1914 owing to its exploitative nature.

            The recruitment programs that targeted Chinese immigrants were highly successful between 1890 and 1940. For instance, in 1911 alone, some 189,000 Chinese immigrants were employed in the Malaysian tin industry (Jackson, 1961). However, between 1936 and 1940, the number of Chinese immigrants drastically decreased (Jackson, 1961). This was large because of the takeover of most mining operations by Europeans through the adoption of the “dredge” technology. By 1940, the number of Chinese immigrants working in Malaysia’s tin industry had reduced by 81 percent (Jackson, 1961). Prior to this sudden decrease, cheap labor from Chinese immigrants had been the most competitive in this industry.

            Chinese migrant labor also led to the transfer of knowledge on mining best practices. These immigrants facilitated a constant flow of information obtained from activities carried out in goldfields. This information was adopted in various activities relating to tin mining. This led to the emergence of new tin mining methodologies. Similarly, best practice techniques were readily adopted because of the fact that the Chinese immigrants were familiar with them. Some of these techniques included Gravel Pump, Chain Pump, and Hydraulics Skimming. The tendency to use these methods had become a widespread practice in Australian goldfields. By 1890, the immigrants had fully adopted the use of steam engine technology in mining activities. This technology was mostly used in flood management practices, which is a typical phenomenon in most mining methods.

            Moreover, Chinese immigrant laborers made significant contributions to the process of industrializing Malaysia’s tin industry. In fact, the truth of the matter is that they were the main mobilizing force behind this industrialization process. The productivity of the open-cast method introduced by the Chinese by far superseded the indigenous panning method that had been relied upon for centuries in the Malay fields of Negri and Selangor (Ching-hwang, 1986).

            However, without the economic enablers put in place in the form of smelting plants, infrastructure, and government, the Chinese could not have succeeded in their pioneering work. Their work would not have led to commercial-scale operations. This facilitative framework was largely provided by the Straits Trading Company, which was based in Singapore. On their part, the Europeans provided steamship transport services. The British administration was at the forefront of coordinating these activities. In these efforts, the ultimate objective was to ensure that the colony’s ultimate objectives were achieved.

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            Therefore, it is not surprising that Europeans eventually sought to break the monopoly of Chinese immigrants in Malaysia’s tin industry. The British administration used a strategic approach to dissipate the “stronghold” that had for a long time belonged to Chinese migrant laborers. They eventually succeeded in breaking this monopoly by facilitating the industrial development of the country’s rubber industry and then deploying the expensive “dredging” technology. Once these strategic measures had been undertaken, the Chinese laborers gradually stopped maintaining their “stronghold” in the tin industry. By 1940, Chinese immigrant labor was not making any significant contribution to the country’s tin industry.

            Furthermore, the introduction of shallow mining practices had a lot to do with the presence of Chinese immigrant labor. Chinese relied heavily on low-technology, labor-intensive methods in the excavation process.  During this time, an average of sixty-seven percent of the industry’s total production costs took the form of cheap labor costs. During the 1900s, this became the operational standard in Malaysia. By shifting to the open-cast method, it became practical for the immigrants to look for new, more efficient sources of ore. This was a better option than mining the existing sources using more labor-intensive methods.

            The threat posed by Chinese workers forced the Dutch and British authorities in Malaysia to come to a mutual agreement regarding the actions that needed to be taken against the immigrants. These two governments agreed to embark on planned development of the country’s rubber industry. This decision was greatly inspired by the recent experiences of the British administration in Southern India, where Tamils had established many Ceylon plantations. The British administration gained the confidence of succeeding in efforts to develop a new industry in Malaysia through collaboration with the Dutch administration.

            The best thing about Malaysia is that many factors played out to the advantage of the establishment of the industry. These factors included civil administration capabilities, availability of cheap labor, and favorable climate. For these administrators, the underlying objective of establishing the rubber industry was to recruit Indian immigrant labor. This migrant would counterbalance the influence of Chinese migrant labor. This would ultimately reduce the influence of Chinese immigrant labor in the country’s tin industry.

            Indeed, the tin industry in Malaysia would not have taken the course it took were it not for the role played by the Chinese immigrant labor. Aspects of Chinese enterprise were introduced in Malaysia by Chinese contract laborers. The political and ethnic balance that was introduced in the country following the massive influx of these immigrants greatly contributed to the country’s social and political stability. Without this stability, it would have been extremely difficult for major developments to be made in the tin industry.

            The success of the tin industry between 1890 and 1940 is credited with propelling the colony into the global trade arena. The Chinese contract laborers played a critical role in keeping the industry moving. At a time when the colonial administration was strategically developing the rubber industry, the migrant workers continued focusing on the tin industry. Without the Chinese workers, most enterprise owners would have switched to the rubber industry and the tin industry would have collapsed. This would easily have happened given that Malaysia provided near-perfect conditions for the rapid development of the rubber industry. These conditions included year-round seasonality, a robust colonial administration, and lack of disease epidemics.

            Chinese immigrant labor also led to changes in the country’s demographics. These changes had a far-reaching impact in the development of the tin industry. The 1932 census showed that Chinese and Indian immigrants made up 53.2 percent of the Malaysian population (Pinches & Lakha, 1992). This was a shocking phenomenon to both the native Malaysians and the colonial administration. This phenomenon was even more complicated within the Federated Malay States. In the Federated Malay States, 63.7 percent of the people were of non-Malay origin while in the Straits Settlements, a higher percentage of 71.5 percent was recorded (Pinches & Lakha, 1992). One of the main implications of these demographic changes was that the tin industry had to be developed in such a way that the interests of different ethnic groups were put into consideration to avoid conflicts.

            Moreover, government structures were transformed to respond to the new phenomenon of a rapid increase in the number of Chinese immigrant workers. The colonial administration could no longer rely on the Negeri system, which was catastrophically disrupted during the inflow of the immigrant labor and the emergence of the tin industry boom (Breman, 1989). The Negeri system had thrived during the early days of the British administration in the country. This system worked well only because the colonial administration only needed to deal with indigenous Malays.

            The influx of Chinese immigrants necessitated the abolishment of slave labor for land cultivation. Within the Negeri System, slave labor was being relied upon at various stages of rice cultivation (Breman, 1989). For success to be achieved with regard to the operations of the colonial administration, this system needed to be abolished. The Chinese migrant labor provided an excellent alternative, particularly following the discovery of methods of large-scale tin mining.

            The shift from slave labor to waged labor marked a major milestone for not only the colonial administration but also the economy of Malaysia. Indigenous Malaysians relied on both slave labor and traditional methods of mining. Chinese contract laborers introduced a culture of not just waged labor but also technical expertise and best practices relating to methods of tin extraction (Purcell, 1965).

            Without the presence of the Chinese workers, the Malaysian economy would have operated in a vacuum following the dismantling of traditional political and economic systems. It would have been difficult for colonial administrators to introduce a new culture of economic development. In the context of the new culture, education played a critical role. During the early twentieth century, the implicit status of upper and ruling classes in areas where tin was being mined started being transformed through education and assimilation into the European bureaucracy.

            Chinese immigrants also contributed to the development of the country’s infrastructure. For tin-mining activities to be carried out effectively, there was a need for infrastructural development to take center stage. In many instances, the assistance of the colonial administration was not forthcoming. Many successful Chinese enterprises took the initiative to contribute to this infrastructural development with the aim of promoting the industry. Some of these developments entailed the localization of economies and participation in civil governance within the overarching process of urbanization.

            In conclusion, the thousands of Chinese immigrant workers who moved into Malaysia contributed greatly to the development of the tin industry in the country between 1890 and 1940. These contract workers brought with them new technological know-how and industry best practices, thereby helping put Malaysia on the global export trade arena. The workers’ prior experience was critical in triggering the rapid development of the tin industry during the late nineteenth century and early twentieth century. This tin industry boom subsided in the 1930s and 1940s with rapid commercialization of the country’s rubber industry.


Breman, J. (1989). Taming the Coolie beast: Plantation society and the Colonial order in Southeast Asia. New Delhi: Pearson Books.

Ching-hwang, Y. (1986). A Social History of the Chinese in Singapore and Malaya, 1800–1911. New Delhi: Longman Publishers.

Jackson, R. (1961). Immigrant labor and the development of Malaya 1786-1920. Kuala Lumpur: Free Press.

Pinches, M. & Lakha, S. (1992). Wage labor and social change: The proletariat in Asia and the Pacific. London: Routledge.

Purcell, V. (1965). The Chinese in Southeast Asia. London: John Wiley & Sons.

Yah, L. (1967). Economic development of modern Malaya. London: Heinemann.

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