Los Angeles Times, October 4, 1993, Monday 

COLUMN ONE

Breathing Life Into Southland:
From Mainland Millionaires to Grad Students, a 'New Wave' of Chinese Immigrants is Invigorating the Economy.

By KARL SCHOENBERGER, Times Staff Writer

A businessman from mainland China walked gingerly into the Monterey Park branch of General Bank one recent day and asked to see the manager. He wanted to know if the institution had any ties to the Beijing government.

None, he was assured.

The man deposited $10,000 on the spot -- and returned the next day to deposit another $900,000 by wire transfer, satisfied that his transactions at the Taiwanese community bank would be kept confidential from Chinese authorities.

Li-Pei Wu, General Bank's chairman, did not blink an eye at this capitalist comrade from Communist China. Business is booming in the coastal provinces, he says, and plenty of private fortunes are finding their way through Hong Kong to safe havens in the West.

The cash from the mainland flows along a well-beaten path. Over the past decade or so, Chinese immigration has infused Southern California with capital, human resources and business savvy that have made it a major hub in a dynamic network that links ethnic Chinese throughout the Asia-Pacific region.

It is a far cry from the tired and huddled masses of the American immigrant tradition. Wu has been watching deposits at his bank throughout the "new wave" of Chinese immigration that exploded in the 1980s. He says it is not unusual for families -- mainly those from Taiwan -- to bring $200,000 in capital to Southern California.

To say that all Chinese newcomers are rich and engaged in lucrative trade with their cousins in Hong Kong or Singapore would be a distortion. Recent arrivals of boat people from Fujian province disabuse any such notion. Chinese in Southern California include poor families, uneducated busboys and sweatshop seamstresses. Sometimes, they are bedeviled by social problems, from organized extortion rackets to violent youth gangs.

But on the whole, the impact of recent Chinese immigration on the troubled Southern California economy has been positive, evidence suggests -- perhaps incredibly so. And this bright note has been largely unsung, lost in the chaotic diversity of the region.

"Clearly, Chinese immigration has had a major effect on the economy, and a positive effect in terms of bringing investment and creating jobs in L.A.," said Michael Woo, the former Los Angeles City Council member who ran unsuccessfully for mayor this year.

During the past 20 years, the Chinese population in Southern California has multiplied nearly sevenfold, largely because of Taiwanese like Wu, the banker, who left the island during martial law to escape political repression and economic frustration.

"We admired the freedom and opportunities of this country," he said. "We came seeking democracy, and a place where we wouldn't be harassed."

Although immigrant Chinese and native-born Chinese-Americans are 2.7% of the population of Los Angeles County -- and less than 2% in the six core counties of Southern California -- their contributions to the regional economy appear to be far out of proportion to their numbers.

Chinese are propping up the sagging real estate market, for instance. Nearly one of five home buyers in Los Angeles County in 1992 had a Chinese surname, according to a study of residential property sales records compiled for The Times by Dataquick Information Systems of La Jolla.

These homes are not just the so-called monster houses in San Marino or Palos Verdes where nomadic businessmen -- "astronauts" -- plunk down their wives and school-age children while spending most of their time in Taiwan making money. Although many immigrants do commute across the Pacific, the vast majority of Chinese home buyers and landlords are seeking security in more conventional housing and putting down roots, community leaders say.

Their enterprises, meanwhile, have changed the face of the local landscape.

While Southern California languishes in recession, Chinese neighborhoods across the San Gabriel Valley and Orange County are thriving. Small Chinese American-owned businesses are creating jobs, in many cases reaching out from their ethnic enclaves to mainstream markets. Even historic Chinatown in Downtown Los Angeles, once left moribund by a flight to the suburbs, is being resuscitated by a new population of ethnic Chinese from Vietnam.

Take a drive along Valley Boulevard through Alhambra into the heart of the San Gabriel Valley, and the retail strip appears increasingly prosperous as the Chinese-character signs grow thicker and thicker. The region's commercial construction industry may be in distress, but optimistic Chinese-American developers still are building shopping malls.

If San Gabriel Square is any indication, business is booming.

Its parking lot at the corner of Valley and Del Mar Avenue was jammed one recent Monday evening, as patrons dined at the square's array of neon-lit Chinese restaurants -- including one serving only "Chinese Islamic cuisine." There is a Chinese department store. And shoppers crowd the aisles of the 99 Ranch Market, part of a successful chain of ethnic supermarkets that started in a Sino-Vietnamese enclave in Orange County.

"If you had a project that size and put it in West L.A. instead of San Gabriel, it would be in foreclosure by now," said Dominich Ng, chairman of East-West Federal Bank, a savings and loan started 20 years ago by the proprietor of a Chinatown bakery and a handful of small investors. The thrift, now owned by a Chinese tycoon in Indonesia, has 22 branches and $1 billion in assets.

"Had it not been for the Chinese support, I think the real estate market would have gotten much worse," said Ng, a Hong Kong native. "Now, the Chinese are going to be creating jobs and helping this economy to start growing again. We may not be the dominant force, but we're going to be very important to the recovery."

Beyond the bright lights of the suburban malls, the Chinese entrepreneurial boost to the economy takes on less obvious forms.

Chinese-Americans such as William Mow, founder of the trendy clothing maker Bugle Boy, are active in the region's light-manufacturing sector. Mow, a native of China and a former electronics entrepreneur, opened a T-shirt printing plant two years ago in Rancho Dominguez to supplement Bugle Boy's source factories in Asia. His Simi Valley-based company employs 2,540 people nationwide, including 193 at the Rancho Dominguez plant, and boasts annual sales exceeding $400 million.

In Downtown Los Angeles, a cluster of mostly Chinese toy wholesalers has revitalized a blighted industrial district -- without a dime of government help. "Toytown," as the checkerboard of little storefronts and warehouses is known, has become a lively confluence of Mercedes Benz-driving entrepreneurs, just around the corner from the homeless missions.

Such conspicuous prosperity also has a potential downside -- especially for a culture that traditionally frowns upon flaunting riches.

"The high visibility of Chinese wealth in Southern California is something I feel very concerned about," said Wellington Chan, a history professor at Occidental College. "The local economy is bad, and you have a small group of the population driving expensive cars and buying up malls. I think there could be a backlash if there is communal strife in the future."

Indeed, many Chinese merchants were among the victims of the Los Angeles civil disturbances in 1992. Though the destruction in the Korean community was far greater, as many as 235 Chinese-owned businesses were burned or looted.

Most Chinese, however -- like other Asian-Americans -- blend into California's economic landscape. Rather than building garish shopping malls, for instance, many successful immigrants have parlayed opportunities for advanced education in the United States into low-key professional careers. Chinese are particularly prominent in Silicon Valley's computer industry and in Southern California's now-hobbled defense sector.

"Chinese-Americans are the backbone of the aerospace industry," said Lily Lee Chen, a former mayor of Monterey Park, arguably the nation's first suburban Chinatown. She is now chairman of a Pasadena company that exports paper to China; her Chinese-American husband is an engineer-turned-venture capitalist.

"My generation has a great collection of scientists and engineers, because when we first came to this country, our people went for salable skills," said Chen, the China-born daughter of a Nationalist politician, who came from Taiwan to study social work in 1958. "We had to do better than others to find jobs, and many of us couldn't rely on verbal communication."

A reverse brain-drain of engineers returning to Taiwan has been evident for several years, following the end of martial law and the start of democratic reforms in 1987. As a newly industrialized "Asian tiger," Taiwan has been transformed from a Third World exporter of human talent to a magnetic land of opportunity.

But Taiwanese transplants are not all bailing out of California's leaky economic ship. Many Chinese engineers are starting businesses, by pooling family money or borrowing from the state's 28 Chinese community-owned banks.

In doing so, they are joining an entrepreneurial tradition that runs deep in their culture.

"I can do more to contribute to the community by being my own boss," said Phillip Chen, who came to Los Angeles to study at USC in 1969 and -- pressured by his parents to become a professional -- earned a Ph.D. in aerospace engineering.

Chen worked for McDonnell Douglas and then briefly for a small Chinese-owned firm that would later move to Taipei and become Taiwan Aerospace, a bold venture aiming for a niche in the global aerospace industry. Chen declined an invitation to join his colleagues.

With $50,000 in savings, he founded Apex Computer Systems, which maintains IBM mainframes and designs custom software systems. He has 23 full-time employees and sales of about $2 million.

"When I first came to this country, I did think about going back," said Chen, who has seen about 30 friends return to Taiwan -- all leaving their families here. "But I've been in America for 23 years. I consider this my home."

*

A diaspora scattering Chinese around the world began nearly a millennium ago, but surged in the 18th and 19th centuries, when European colonial powers contracted Chinese labor gangs and merchants to develop their colonies in Southeast Asia, Latin America and Africa.

The California Gold Rush and railroad jobs brought the first Chinese immigrants to the United States in the mid-1800s, mostly from the Canton Delta. Later, the flow was all but cut off by racist exclusionary laws; it gushed again after immigration reform in 1965.

What then began was America's "second wave of intellectual immigration," according to Ling-Chi Wang, a professor of ethnic studies at UC Berkeley. The first wave, he said, was the arrival of European Jews in the years around World War II; Chinese were at the core of the second wave after 1965.

Many came to study. Taiwan sent 100,000 students to the United States between 1950 and 1983, and fewer than 15% went home after graduation, Wang said.

More recently, the "cream of China" has come from the mainland, leaving a population of about 80,000 graduate students, current and former -- all of them granted political asylum by President George Bush in 1989, after the bloody crackdown on the democracy movement at Tian An Men Square.

The 1990 census counted 1.6 million ethnic Chinese in the United States, including 324,274 in Southern California -- officially the largest Chinese community in the nation, slightly larger than that in the Bay Area and far outstripping New York and its suburbs.

In Los Angeles, Chinese immigrants and their American-born descendants are a study in diversity. The newcomers are a mix of people who speak different dialects and frequently are forced to communicate with each other in English. Many have been twice displaced, born in China and arriving here after fleeing communism and rebuilding their lives in Taiwan or Hong Kong. Others have come after several generations in Malaysia or Thailand.

In the 1990s, immigration attorneys say they have observed a new trend: Privileged relatives and cronies of top Communist Party cadres are coming and investing, bringing with them formidable sums of money.

Los Angeles lawyer Howard Hom said he has had many clients from mainland China acquiring permanent residency status. Several are applying through a federal program that gives immigrant status to foreigners promising to invest $1 million in a business that creates at least 10 full-time jobs.

"I was astounded myself at first," Hom said. "But it seems that in these past few years, they have salted away tons of money in Hong Kong banks. These are primarily people with connections to the (Communist) party elite.

"They're very shy, for obvious reasons," said Hom, explaining why his clients would not be available for interviews.

Although the million-dollar immigration program has had few takers since it went into effect in 1991, a high proportion of the interest has come from the Chinese. More than one-third of the most recent 488 millionaires to apply were from China, Taiwan or Hong Kong, according to the Immigration and Naturalization Service.

*

Mega-wealth is one extreme in the paradox of Chinese immigration; the other is poverty. While the Chinese economy is thriving under free market reforms and experiencing the highest growth rates in the world, it is also casting off a small tide of boat people.

Ominous headlines over the past year have described a flotilla of squalid freighters bound for the Mexican and California coasts with a miserable human cargo of undocumented migrants. They come with debts as high as $30,000, owed to Chinese criminal syndicates who attempt to smuggle them overland to New York, where they toil as indentured servants in that city's underground economy, authorities say.

Each arrival by sea raises a specter in some Americans' minds of a nation with 1.2 billion people unleashing swarms of economic migrants. Once here, they might claim asylum from political persecution under liberal U.S. laws.

But a sober look at the illicit exodus throws cold water on this kind of paranoia.

The number of Chinese caught trying to enter the United States illegally remains minuscule compared to the legions of undocumented migrants from Latin America. The INS says 2,985 undocumented Chinese were intercepted at sea and another 1,298 at U.S. airports during the first half of 1993; at the Mexican border, an average of 3,140 undocumented migrants were captured each day in 1991-92.

Still, China's hinterlands are missing out on the coastal boom, struggling with the kind of dire poverty that generates economic migration. With Beijing's human rights record still drawing international condemnation, the problem cannot be underestimated.

"The vast majority of these people say they're coming here for economic opportunities, but they know that 'political asylum' is the 'open sesame' that gets you in and allows you to stay," said Jeanette Chu, a senior special agent at the INS in Washington.

Chu, a law enforcement veteran of Chinese ancestry, said she became personally concerned about the possibility of a public backlash against Chinese-Americans when the smuggling boats started landing. And she believes that illegal Chinese migrants are liable to be disappointed.

"What's the likelihood you're going to succeed when you come here $30,000 in debt to a bunch of thugs?" Chu said. "It's a lot different than coming here to help out in your uncle's restaurant."

As it is, poverty is no stranger to the Chinese community in Southern California, though not to the degree of deprivation experienced in parts of China.

An analysis of sample data from the 1990 census suggests that 15% of ethnic Chinese in Southern California are living at or below the poverty level, despite the group's average household income of $48,599. By comparison, the poverty rate is 6% for whites, 21% for blacks and 22% for Latinos.

"We see a lot of struggling immigrants out there having difficulty with the basics of economic security," said Debora Ching, executive director of the Chinatown Service Center. "Newcomers (without skills) don't have that many possibilities in this job market."

Indeed, outside the plethora of ethnic restaurants, low-end jobs for Chinese are scarce. Southern California no longer has many Chinese sewing factories, and those that have survived have a mixed work force.

Consequently, the city has not attracted illegal Chinese immigrants on the scale of New York or San Francisco.

"We don't have the sub-economy to absorb them," said Paul Ong, an economist at UCLA. "The Chinese garment industry in Los Angeles faces fierce competition from manufacturers who use cheaper labor -- Latin labor."

Although Los Angeles continues to benefit from the incoming flow of capital and investment that follows well-educated, prosperous Chinese immigrants, the tap gradually is being turned down as California's economy falters, some observers contend.

"Now people here are going where the action is, back to Greater China," said Fred Hong, a Hong Kong native who plans to open a branch of his Los Angeles law office in Guangdong province this month and spend half his time there. "People are using their skills and the networking they acquired over here to make money over there."

Daniel Yee, an American-born contractor, is another example of the back-to-Asia trend. In July, Yee announced plans for his San Gabriel-based JTL International Corp. to build a $740-million resort near Taipei, with financing from Taiwanese, American and Japanese investors.

Presumably, however, a lot of the profits from these ventures in the Chinese development boom will come home, along with the Chinese entrepreneurs, to America. Similarly, the Taiwanese "astronauts" and repatriated engineers can be expected, eventually, to reunite with their families in Los Angeles.

The California dream may be fading in bitterness for many long-time residents. But new immigrants from Chinese communities around the world still are coming to the Southland -- energetic, ambitious, hungry for a good education and sometimes laden with lucre. The Gold Rush, this time, is from west to east.

Times staff writer Patrick Lee contributed to this story.

Next, in Business: Profiles of Chinese entrepreneurs in Southern California.
 
Economic Clout

Nearly one in every five homes sold in Los Angeles County in 1992 was purchased by someone with a Chinese surname. Because ethnic Chinese made up less than 3% of the total population, their role in propping up the sagging residential real estate market appears critical.

Note: Figures based on a Times analysis of the top 100 surnames of home buyers in Los Angeles County in 1992, as provided by Data Quick. Data was weighted proportionately for names attributable to more than one ethnic group. Hispanic surnames used by Filipinos were not included in calculations. Data sample represented 27% of all property sales.

Source: Data Quick Information Systems, Los Angeles Times
 
The Southland's Chinese Community

Including recent immigrants and long-time residents, the Chinese community is one of the fastest growing in Southern California. And its economic contributions -- largely unsung -- are disproportionate to its size.

Dramatic Growth

The number of ethnic Chinese in Southern California has increased nearly sevenfold during the past two decades. Los Angeles and Orange counties have the largest Chinese communities.

Diverse Origins

Contrary to the myth of a homogeneous enclave, ethnic Chinese in Southern California have diverse roots. One in four was born in the United States, while a similar proportion was born in China and immigrated here -- either directly or, more likely, by way of Taiwan or Hong Kong.

China: 25%
United States: 24%
Taiwan: 22%
Vietnam: 11%
Hong Kong: 8%
Other, Asia: 7%
Other, World: 3%
Note: Based on estimates by Richard O'Reilly, Times director of computer analysis, from the Public Use Microdata (PUM) sample, U.S. Census, for *Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.

Wealth and Poverty

The average earnings of ethnic Chinese households in Southern California are relatively high compared to other ethnic groups. Yet Chinese-Americans are not strangers to poverty -- especially the newcomers struggling to adjust in the job market.

Average annual household income

Those at or below poverty level (% of Southern California population)
CHINESE: 15%
OTHER ASIAN: 13%
WHITE: 6%
BLACK: 21%
HISPANIC: 22%
* Includes Los Angeles, Orange, San Diego, San Bernardino, Riverside and Ventura counties.

Source: Census Bureau, 1990 Census sample data, compiled by Richard O'Reilly, Times director of computer analysis

GRAPHIC: Photo, Orient Express: A 'new wave' of Chinese immigrants is pumping capital into the Southland. The influx has made the area a major hub in a network linking ethnic Chinese throughout the Asia-Pacific region. Above, the crowded San Gabriel Square, a Chinese shopping mall. ; Photo, . . . Business is booming at San Gabriel Square, center. . . . LORI SHEPLER / Los Angeles Times; Photo, Li-Pei Wu, left, chairman of General Bank, fled repression in Taiwan. . . . VINCE COMPAGNONE / Los Angeles Times; Photo, . . . Lily Lee Chen, right, who was born in China, heads a Pasadena exporting business. MIKE MEADOWS / Los Angeles Times; Chart, The Southland's Chinese Community / Los Angeles Times ; Table, Economic Clout / Los Angeles Times