"I remember that when I was demobilized from the army in 1972, I carried a short-form resume which recorded my place of origin as Haicheng County, Liaoning Province. When I went to look for work at companies where I thought I had a good chance, I was rejected by one after another. This time, returning from the United States, I again used the same resume to look all over the place to find a job, but I am still empty-handed. I often think to myself in the quiet of night; at 40 years of age, with a higher education, and more than 10 years' work experience, why can I not find work? In fact, I already knew part of the answer ten years ago, and today it is still the same answer: 'restricted to Taiwanese." This was a reader's letter that appeared in the Independence Evening Post in 1987.

Such suspicion is not an isolated case. Some people say that when certain businesses are looking for new staff they are accustomed to speaking Taiwanese in interviews. If you cannot speak Taiwanese, then it is very hard to be accepted. Others say that in conglomerates such as Formosa Plastics, Evergreen and Cathay, it is very hard for those from outside Taiwan to make headway. Then there are those who say that bosses from other Chinese provinces will systematically promote their brethren from the Chinese mainland.

The pharmacy contains around 500 different medical raw materials.

Taiwanese boss--Taiwanese workers?:

Such rumors seem to point to a covered up suspicious point: does the provincial barrier exist in the personnel systems of businesses?

In 1989, Wang Fu-chang, an assistant researcher in Academia Sinica's Institute of Ethnology, undertook statistical research into the provincial makeup of the personnel structures of some 2200 of Taiwan's most important businesses. He discovered that in two-thirds of the businesses, at the managerial level and above, there was a high level of personnel of the same provincial background. From the figures it could be seen that among the managers of Taiwanese companies, the proportion of natives of Taiwan was as high as 92 percent; in mainlander companies, managers from other provinces made up 62 percent of the total. It was even found that 79 percent of native Taiwanese employers and 34 percent of those who originated from mainland China had right-hand men and managers who were 100 percent from the same "provincial clan."

"Do not just see that the proportion is lower in mainland companies than native Taiwanese companies. You should also know that the size of the population originating from provinces outside Taiwan is only 14 percent of the total. So the provincial barrier among non-Taiwanese companies can be considered to be very clear," points out Wang Fu-chang.

In fact, according to the provincial backgrounds given in the list of managers in ROC enterprises published by the China Credit Information Service in 1991, the particular coloring of many mainlander enterprises and many Taiwanese enterprises is very clear.

In July last year the following advertisement appeared in the jobs columns of the two main newspapers: "New art center of large enterprise seeks one secretary and several executive planning assistants. Must be junior college graduates or above, capable of executive work with artistic flare. Good foundation in English and Japanese. Preferably of southern Taiwanese origin. (Subsidy for northbound train)." The company which placed the advertisement was a well-known cemetery company, Chinpao Shan. The text was selected by the director general, Tsao Jih-chang. It drew applications from more than a hundred people. After a process of elimination, interviews, and second interviews, the final result was decided by Tsao Jih-chang. The seven successful new people were just as he had wanted--all Taiwanese.

Although some large businesses have been labelled as provincial, there is still no way to stop the determination of professionals from outside knocking at the door to get in. （drawing by Tsai Chih-pen）

Territorial kinship:

Wandering among the forest of skyscrapers of eastern Taipei you can clearly feel the pulse of Taiwan's economic vitality. With the increasing pluralism across the whole of society and the modernization of today, it is very hard to believe that the provincial barriers of a bygone era still persist in businesses.

"But this is a very natural phenomenon," says Ben Wan, who is responsible for counselling small and medium sized businesses on modernization. As vice president of the China Productivity Center, he observes the phenomenon with great acuity. Looking back at how these businesses started up, how they came to have their provincial coloring can be understood.

The 1950s to the 1970s was a period when the conditions for Taiwan's economic development were laid throughout society. It was at this time that the main stream of today's medium and large businesses put down roots. "Tracing things back to that time, the February 28 Incident was not long past and there was actually much friction between people originating in Taiwan and those from other provinces. There was also a language problem when it came to communicating between the two groups. In this kind of situation, when people wanted to start up a business, of course they would find other people with the same language and on the same wavelength to be their partners. Think about it, with everybody together speaking the language of their home town, the feelings of kinship were really very different," says Ben Wan.

Those from the same village are often as close as family members. Chinese people originally paid great attention to the morality of the family and village fraternity. In struggling along together, businesses founded on the core of family and kinship ties would evolve naturally. As time passed, the phenomenon of today's numerous business "cliques" and "clans," appeared such as the Tainan, Sanchung and Chiayi cliques of Taiwan; and the Jiangsu, Shandong, and Hebei cliques formed by those who had crossed the sea from mainland China. All of these were the products of their time.

"Provincial demarcation is a by-product of these kinds of relationships based on blood-lineage and geographical links," points out Ben Wan.

The government brought many technicians and businessmen along when it moved to Taiwan, forming a major power behind early industrial and commercial development .（photo courtesy of Yulon Motor Co., Ltd.）

Taiwanese is the mother-tongue of our business:

President Enterprise is a bastion of the Tainan clique, and makes no attempt to hide the "native" coloring of its business. Even at its office in the capital, Taipei, you can get a feeling of its grassroots nature from the steady stream of Tainan-Taiwanese spoken.

"President has no mainlanders at management level at present," says Yang Yu-pao, assistant manager of President's public relations department. This is because, in the early years of the company, a personnel policy preferential to local people was stipulated. Down to today, the company's senior managers are still all people from Tainan who have risen through the ranks.

"In the early period, meetings from top to bottom were all conducted in Taiwanese, because the conveners used Taiwanese to preside," says Yang Yu-pao.

Out of Taiwan's 100 leading companies, 77 percent are led by Taiwanese. The older generation of leaders all grew up with an education in their mother tongue and in Japanese. Speaking Mandarin would often pose communication problems, so the style of using Taiwanese at management level took shape. In addition, with most employees originating from Taiwan, the style at the top was followed at lower levels. It was thus that the mother-tongue culture of businesses was produced.

Foreign businesses come in and domestic ones go overseas. As the business network gets daily more internationalized, the provincial barrier gradually becomes more blurred.

Divided by demands of the tongue?

These kinds of natural repercussions of the culture of the mother tongue have, however, given rise to suspicions in outside circles of a provincial bar among business personnel. Originating from Anhui, Chao Chi-cheng, a graduate of the Graduate School of Agricultural Economics at National Taiwan University, now teaching at the Ming Chuan Colege of Management, thinks that the tendency for linguistic nativization in business is not something that should be taken for granted. Three years ago, he went to apply for a job at President, but because he insisted on using Mandarin in his interview with the manager, the situation was rather embarrassing and he was not accepted for the job. "Every place has its dialect, but in a public situation it is best to use Mandarin," he says.

Ku Cheng-tung, the first "mainland lad" to break into the native Taiwanese bastion of the Ho Cheng Group (HCG), thinks that the language policies of businesses are at times actually due to the demands of practicality and are not necessarily a kind of chauvinism. "Taking HCG as an example, the people we come into contact with are either common plumbers or architects and business people. On the whole, they are of Taiwanese origin. Taiwanese is also used an awful lot in administration."

Shih Ming-shy, assistant manager in charge of personnel at President, also points out that business operations are naturally market led. With more than nine-tenths of the businessmen who come to them being of Taiwanese origin, the language requirement made by President is reasonable. But the requirements of language do certainly not divide people by province: if somebody from another province can communicate in Taiwanese, then they can become part of President without any problem. If a Taiwanese can speak Taiwanese, but not too fluently, his usefulness could also be discounted.

In recent years, given the ever-widening development of President's operations, local personnel have not been able to supply all the company's needs. Recruitment must now be made from all areas, and young people with origins going back to mainland provinces have begun to enter President, resulting in a steady loosening of the Tainan-dominated Taiwanese circle.

Native Taiwanese businesses place great emphasis on customary beliefs. It is never forgotten to erect an altar for the Ghost Festival and pay respects to the good brothers of the netherworld.

Early experience:

If you want to establish a good network between people in the market, then language is the most important tool for communication. In early years, Taiwanese and mainlanders, due to language and kinship factors, went along different tracks. This created a difference between the economic activities of the two sides.

When Lin Chung-cheng, an Academia Sinica researcher in social sciences, examined the early economic differences between native Taiwanese and mainlanders, he discovered that native businesses tended to take root among the general public and situate themselves in downstream manufacturing, while mainlander businesses were mostly developing upstream supply industries which could avoid the market weakness of insufficient human resources.

Looking back at the experience of the early years of Taiwan's development, when the government came to Taiwan in 1949 it brought along some important businesses from the coastal cities. From Shanghai came ten large textile factories, a large amount of finance, equipment, technology and personnel, which was just right to make up for the shortcomings left after the withdrawal of the Japanese. Because at that time most of Taiwan's elite went into agriculture and medicine, the technicians who came over from mainland China formed them selves into a body which became the main force of Taiwan's early industrial and commercial development. Many mainlander businesses at that time were thus created on a base of shared experiences, technology, and the strong sentiments of kinship away from home.

Yulon Motor Company numbers among one of the members of the Zhejiang/Jiangsu clique. Although today there is no visible mainlander coloring at the management and leadership levels, looking back to the early years, the then general director of Yulon, C.H. Lee, admits that there was such a time.

In 1953, Yulon wanted to start up a machine manufacturing company. Because at that time the only people in Taiwanese society with technical expertise were military personnel, the company went to the air force to recruit workers. "Of course, these people were all from mainland China." In the early years, Yulon just could not avoid having a heavy mainlander coloring, but in later days, following the recruitment by examination of trained personnel, native Taiwanese gradually came into the company. By the 1970s, the provincial coloring had faded.

The February 28 Incident, remembered in this procession, was instrumental in creating provincial barriers. But efforts by concerned people and government sincerity have now brought consensus on ethnic integration.（photo by Diago Chiu）

Is it hard to solve the provincial complex?

Of course, the creation of the provincial bar in business is not all down to natural conditions, such as blood-line, geographical origin and language. In part it has been built up deliberately. When the government came to Taiwan over 40 years ago, power was in the hands of those labelled as being from "outside the province." The main industrial and commercial businesses, and economic power, were also primarily "mainlander." This meant that chairmen, directors and other important leadership posts were largely held by mainlanders, so as to establish good ties between business and the central government.

Yet this kind of phenomenon, in the eyes of some Taiwanese, created an image of slyness and cunning. Right up to the present, a minority of older-generation heads of enterprises still have a wariness towards mainlanders that they cannot discard. Such is the case with Chinpao Shan's Tsao Ji-chang, who makes his complex very clear.

"Most mainlanders have a wily nature: great at talking, loving to argue but not liking hard work; they are very suitable for thinking up ideas and moving their mouths, but their sincerity is limited. They often put profit before right, and let the boss lose out." Tsao Ji-chang says that this view comes from "40 years of getting the short end of the stick."

Thus when Chinpao Shan put out its advertisement last year, looking for new people to develop its related enterprises, the notice frankly stated "Southern Taiwanese preferred." Tsao Ji-chang's view is that, "The northerners have been more seriously 'polluted' by mainlander ways, the central and southern Taiwanese have kept more of their original Taiwanese purity, ability to suffer and work hard, and their character of loyalty and sincerity." Tsao Ji-chang stubbornly persists in his preference of always using Taiwanese.

In recent years the property business has been booming with intense competition. It seems that if you want to make sales then you had better be"bilingual", speaking both Mandarin and Taiwanese.

Systems replace personal control:

In medium and large enterprises, figures such as Tsao Ji-chang, who proudly advocate their provincial preferences, have gradually faded out over 40 years of provincial integration. However, among medium and small businesses, because personal relationships are close, the preferences of bosses are often the deciding factor in the choice of personnel. With Taiwan's medium and small enterprises absorbing 70 percent of the work force, there are many small, exclusive clan groupings.

"In medium and small businesses, the relationship between the boss and the workers is not just that of employer-employee, but is also one of private relationships between different generations and kinship sentiments. Selection of staff often takes place according to individual preferences." Lin Chung-cheng points out that, in the early years, Taiwan's large businesses were also like this, with the Power centers of companies taking on a particular coloring, which was very natural.

But this kind of situation in a large company is naturally reduced when it is broken down into specialist departments. "It is certainly not that the phenomenon is not there, but it is shrunken and concentrated in a limited circle at leadership level." Lin Chung-cheng thinks that among the general workers, it is very hard to maintain any kind of restriction.

Formosa Plastics is a typical example. In the past, Formosa Plastics always insisted on having a Taiwanese coloring. When the business expanded and selection came to rely purely on examination, there was a gradual move away from the provincial bar. When the problem arose last year over what time work would start on the sixth naphtha cracker and the media were knocking at the door every day, this company with its heavily colored native image, left its public relations to a mainlander. Mainlander spokesman Jack Jen soon became the unintended topic of the day. The same thing also happened with the changes undergone by other large companies. Due to the systematization of operations, personal control rapidly decreased and enterprises ceaselessly absorbed large and varied numbers of the new generation.

Annie Wang, who is currently working in Formosa Plastics' South Asia Office, is second generation "pure Zhejiang." On graduation she knew that if she wanted to get a job then she should never look to a small company, but must get into a large enterprise. Only then would she be able to avoid problems of provinciality and language. So she chose Formosa Plastics. Although she can often hear Taiwanese being spoken, with the increasing "Mandarinization" of the company, she has no problem fitting in.

When most people start up in business they rely on kith and kin for support and struggle along together to conquer the world.

A bullish spirit:

Wang Ming-ko, who is working on a doctorate in the East Asian department of Harvard University, describes Taiwan's society as being like a special breed of bull that is a cross between a common ox and a yak. With the placidity of the ox and the strength of the yak, it can both acclimatize to the high plateau and the low valleys: it is Tibet's most prized kind of bovine. In Taiwan, the earlier mixture of native Taiwanese with mainland Chinese in blood, culture and language, came to produce a new generation with the advantages of both. It is only right that this "bullish spirit" should be used to describe the mix of people there.

Koo Chen-fu, a leading figure in Taiwan's business circles and chairman of the Taiwan Cement Corporation, is representative of the bullish generation. A native of Taiwan, he does not have any parochial coloring about him. His broad and magnanimous personal style has always been respected by native Taiwanese and mainlanders alike. Concerning the phenomenon of the provincial bar in business, he expresses his opinions with a customary breadth of vision: "Perhaps it is because the first generation of entrepreneurs did not have the benefit of a wide education that it is comparatively easy for them to use their individual experiences or subjective preferences as standards by which to select personnel." Such standards could at times be those of provincial identity, sometimes religious belief. But through the process of intermarriage, education and language assimilation, ideas gradually change. At the same time, the views of the second business generation, with their higher and more extensive education, cannot continue to preserve the standards of the older generation.

"Now is the age of using people according to ability, especially now that the government's economic policy is moving towards liberalization and internationalization. Hopefully, domestic enterprises can compete in their industries internationally. They should even absorb personnel from overseas. So can there still be talk of the provincial bar?" asks Koo Chen-fu.

Capital-labor conflicts supplant the provincial problem:

In the Hsinchu Industrial Park, a group of young engineers who have returned from studying in the United States rack their brains before a computer monitor. They are debugging a massive and complicated program.

From their appearance it is impossible to tell whether they are native Taiwanese or descended from mainlanders. International and professional coloring has already concealed their native characteristics. Following the 1970s, many native Taiwanese and second-generation mainlanders, sharing the same expertise and ideals, have come to work together. Information about the provincial identities of managers from Taiwan's leading 100 companies shows that companies which mix people who have different provincial identities in their leadership levels are slowly on the increase: from six percent in 1978, increasing to 12 percent in 1991. Although this cannot be considered to be a rapid increase, it can already testify to the tendency towards integration.

"Before I had been to mainland China, I thought that Taiwan seemed to have a problem of provincialism. But now that I have been to the mainland a few times, I do not talk about the provincial problem anymore. It seems that when native Taiwanese and those who have come to Taiwan from other provinces go to the mainland, they all have the same name--Taiwan compatriots," points out Allen Hsu, Yulon's executive vice president.

Ben Wan thinks that entrepreneurs are mainly practical, foresighted and concerned with efficiency, costs and profits. When many businesses move towards internationalization, they urgently want to integrate into local areas but cannot do it. Going to Guangdong and Hong Kong, they all want to study Cantonese; going to Beijing they want to study the Beijing dialect, so as to facilitate management. In this kind of situation, businesses cannot go back down the road of imposing restrictions on their own people.

"The problem of provincial identity in businesses? I think that now it has already been supplanted by capital-labor conflicts," is the observation of the vice editor-in-chief of Strategic Productivity Monthly. Susan Tsai. Perhaps this is really business's timely conclusion to this old issue.

[Picture Caption]

p.100

Although some large businesses have been labelled as provincial, there is still no way to stop the determination of professionals from outside knocking at the door to get in. (drawing by Tsai Chih-pen)

p.102

The government brought many technicians and businessmen along when it moved to Taiwan, forming a major power behind early industrial and commercial development .(photo courtesy of Yulon Motor Co., Ltd.)

p.103

Foreign businesses come in and domestic ones go overseas. As the business network gets daily more internationalized, the provincial barrier gradually becomes more blurred.

p.104

Native Taiwanese businesses place great emphasis on customary beliefs. It is never forgotten to erect an altar for the Ghost Festival and pay respects to the good brothers of the netherworld.

p.105

The February 28 Incident, remembered in this procession, was instrumental in creating provincial barriers. But efforts by concerned people and government sincerity have now brought consensus on ethnic integration.(photo by Diago Chiu)

p.106

In recent years the property business has been booming with intense competition. It seems that if you want to make sales then you had better be"bilingual", speaking both Mandarin and Taiwanese.

p.107

When most people start up in business they rely on kith and kin for support and struggle along together to conquer the world.

p.108

Having breached the provincial bar, professional ability and relations hips with colleagues have become key factors in the selection of personnel.