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This paper is concerned with the economic history of immigrant Chinese in colonial Rabaul and its hinterland (in German, later Australian, New Guinea) over almost a century to the Independence of Papua New Guinea in 1975. It is a companion piece to another study concerned with how Tolai people of the Rabaul hinterland accommodated themselves to the colonial market economy (Conroy, forthcoming). Without pretension to novelty in the historical narrative it asserts the value of viewing events through the lens of 'informal economy', as constructed by Keith Hart. The Chinese are shown as operating an informal economy parallel to, and inter-penetrating, the formal colonial market economy. That formal economy conformed with norms of Weberian 'rational-legal' bureaucracy, guided (in the case of the Wilhelmine state) by an ideology of 'national-economic purpose'. The Chinese, however, demonstrated to the Tolai that it was possible to participate in the market economy without complying fully with bureaucratic norms. The Germans found it difficult to confine Chinese to dependent and subordinate roles, and Chinese often colluded with Tolai to frustrate German (and, later, Australian) efforts to regulate economic activity to their own advantage. The paper describes the growth and increasing formalization of Chinese business in Rabaul, while noting a continuing strain of informality in their economic activity right up until Independence. It suggests that knowledge of the history of the early colonial-period Chinese may be useful for understanding the character and trajectory of 'new' Chinese settlement in the twenty-first century.
John Conroy lived and worked in PNG over the period 1970-1981, where he lectured in Economics at the University of Papua New Guinea, and served for four years, 1977-81, as Director of the PNG Institute of Applied Social and Economic Research (predecessor of the present National Research Institute). Subsequently, during the 1980s, he lived and worked in Indonesia for six years. He is currently a non-resident Visiting Fellow in the Crawford School. John is preparing a monograph on the idea of the informal economy and its application to PNG. In that connection, he is currently working on the emergence of an informal market economy on the Gazelle Peninsula and the interactions between the native Tolai people and the immigrant Chinese during the colonial period.