Next century these children will be among the richest, best-educated and most successful people in the world. What makes the Chinese run?

From being the poorest ethnic group in the 1950s, the Chinese now enjoy a higher living standard than any other group in Britain, including the whites. The figures speak for themselves: on average Chinese men earn pounds 368 per week, compared with pounds 331 for white men; only 9 per cent are unemployed, compared with 15 per cent of whites, and their participation rate in higher education is far higher than that of the white community.

The Chinese, once a byword for poverty, are now riding high. One reason is the emphasis on education, which has been the passport to success for many young Chinese; the other is more prosaic: self-employment, at the heart of which stands that traditional icon of the Chinese community the world over, the restaurant.

The Chinese population in Britain may be less than 200,000 - or 0.3 per cent of the population - but their rising fortunes mirror those of Chinese communities all around the world. The Chinese diaspora - the largest of them all - numbers about 50 million (including Taiwan but excluding Hong Kong) and can be found from the United States to Latin America, from Australia to the Caribbean, from Africa to Europe. Their situation, of course, varies enormously from country to country but the striking characteristic, almost everywhere, is how well they are doing.

Take the US, where the Chinese community arrived in the middle of the 19th century, first attracted by the gold rush and then to work as coolies building the railroads. They suffered harsh discrimination, were the prime targets of the exclusion acts of the 1880s (which all but halted further Chinese immigration), and were not allowed to become American citizens until after the Second World War.

Today they are the educational high-fliers of American society. As Professor Ling-Chi Wang, of the University of California at Berkeley, points out: "Chinese Americans have done phenomenally well in public schools, and especially in the elite universities and colleges. I predict that, in the near future, a majority of students at the nine campuses of the University of California - which are among the leading educational institutions in the US - will be Asian Americans, the largest group of whom will be Chinese Americans."

In California's Silicon Valley, the entrepreneurial heart of the information revolution, about one-third of the engineers are Asian-Americans, with the Chinese comprising the largest single group. Ling-Chi Wang argues that "the migration of Chinese intellectuals to the United States since 1945 has far exceeded the Jewish migration in the 1930s, and will be seen by future historians as one of the most significant contributions to the development of American science and technology".

A similar picture of achievement is being repeated in Australia and Canada. But it is in South-east Asia that the Chinese diaspora is not only greatest in number, dating back many centuries, but has also been most successful.

Though comprising a minority in every country in the region, bar Singapore, everywhere the ethnic Chinese are the most prosperous single group. In Indonesia, though comprising only 3 per cent of the population, they own 80 per cent of the wealth: similar disparities apply in Malaysia and Thailand.

So how can we explain the success of the overseas Chinese? It is not easy to generalise across continents and divergent histories. Many of the characteristics displayed by the Chinese - their belief in education, their appetite for hard work, the role of the family - are also true of other migrant groups. However, Wang Gungwu, an eminent historian of the Chinese diaspora, now living in Singapore, argues that the history of the overseas Chinese has imbued their communities with certain traits which distinguish them from other migrant groups.

Overwhelmingly from southern China, and regarded by the old, northern dynasties as inferior, they learnt to live in China and then in the countries where they chose to settle by relying on their own resources, never looking to the state for protection or assistance. According to Wang Gungwu: "Their survival demanded that they had to make adjustments to different cultural circumstances, different political environments and adjust accordingly in order that they could still do business and maintain their living standards, sometimes under very hostile conditions."

Everywhere, when people speak about the Chinese communities, the same words recur: hard-working, pragmatic, adaptable, hard-headed, resilient. Always a minority in usually unfriendly conditions, the overseas Chinese have relied on their own support systems - the family and kinship networks based on their ancestral villages in southern China. Chinese communities boast a plethora of private schools, credit organisations, cultural groups and the like, not to mention those Chinatowns across the world which are the physical embodiment of that sense of difference and solidarity.

For Wang Gungwu, the glue which coheres Chinese communities even when they are, on the face of it, quite disparate, has something to do with a unique quality of Chineseness. "The sense of Chineseness comes from an identification with the history of China as a distinct area, in which the historical events are well recorded but quite different from everybody else's. It's that long, continuous evolution of particular ways of looking at the world, ways of expressing themselves - in terms of language, literature, art, ceramics, customs and practices, all of which have deep roots and all of which are so different from other cultures."

With the partial exception of South-east Asia, the success of the overseas Chinese is a very recent phenomenon, confined to the past two or three decades. Before then, the overseas Chinese were generally near the bottom of the pile in many of their adopted countries. Nor was China, one of the poorest countries in the world, a source of prestige or self-esteem.

Buried deep in the psyche of the collective Chinese memory, of course, is the glory of the Middle Kingdom, when China was the epicentre of world civilisation - as one European monarch found out to his cost, according to a popular apocryphal tale. This monarch wrote to the Chinese emperor proposing a delegation to discuss trade, and received a rather curt reply, thanking him for his interest, but saying that they had everything that they could possibly need, and there was nothing that he could have that they could possibly want.

The recent success of the overseas Chinese, however, has coincided with the spectacular transformation of China itself. Testimony to that sense of Chineseness that Wang Gungwu describes, the overseas Chinese have been crucial to China's economic growth, supplying around 80 per cent of the inward investment over the past two decades. Unsurprisingly, China's renaissance is not only a source of pride for the overseas Chinese, it is also exerting its own particular spell, as growing numbers of overseas Chinese make the journey to China, often for the first time.

As with migrants from other countries who return to their ancestral homeland, what they discover is often a bewildering and alien environment. Katherine Gin, a high-flying Chinese-American in her mid-twenties, had decided to work in Peking for a couple of years to learn Chinese and discover her Chinese self.

"It certainly didn't feel like a homecoming," she says. "It was a mixed thing. Originally I came to be with people who looked like me, but that surface connection didn't go very far. It's when I am walking round the streets that I most feel like a stranger. But when I am in people's homes, I feel much more at home because the culture is so similar to that of my family back in the States."

Such an ability to deal with different countries and cultures is one of the great advantages of a diaspora. Historically, not quite belonging, being a minority, forever the perennial outsider, was regarded as a distinct disadvantage, but in the era of globalisation where mobility is seen as a virtue, multiple identities are not only more common, they are also a major asset. As Robin Cohen writes in his book Global Diasporas: "In the age of globalisation, their language skills, familiarity with other cultures and contacts in other countries make many members of the diasporas highly competitive in the international labour, service and capital markets."

This is certainly true of the overseas Chinese. Their capacity to operate in different countries and contrasting cultures is an extraordinary facility. Explore the family situation of almost anyone in London's Chinatown, or for that matter in Sheffield's Chinese community, and compared with your average white Briton it is another world: family members are invariably dotted around the world, be it in Hong Kong, Malaysia, Canada, China, Australia or wherever. While we used to follow the flag, they follow the family.

Home can be many different places, citizenship - in contrast to our experience - is an issue neither of principle nor culture but pragmatism. As Zongyu Li, a young Chinese engineer in Silicon Valley told me: "It doesn't matter whether I'm a Chinese or American citizen, we are basically living in a global village."

Or Wei Chao Yi, a businessman who divides his time between Melbourne in Australia and China's Tianjin: "I don't care if I hold a Chinese or Australian passport. It depends on which is most convenient." As it happens both - for the moment - are Chinese citizens.

There has been much fanciful talk of the Chinese diaspora as some new, great multinational power. This is an absurd exaggeration. Nonetheless, it is clear that, especially in the context of China's growing success, the Chinese diaspora could well prove to be one of the great winners of the new millennium.

`Proud to be Chinese' is on BBC2 on Wednesday, 16 December at 7.30pm

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