More than 500 years ago, when skilled Chinese seafarers sailed across the Nanyang ("southern ocean") in search of trade, they inadvertently created a unique racial group that would develop a colourful fusion culture, which flourished until the mid-20th century.

When those Ming-dynasty merchants stepped ashore in the ports along the Strait of Malacca they took local wives and concubines, and in doing so created an enduring cultural identity known as Peranakan, which preserved core Chinese values while adapting to local communities and can still be found today.

"Peranakan" is derived from a Malay word meaning "locally born" and it distinguishes the long-standing and wealthy Chinese commercial elite from the later waves of migrant labour, who established the Chinese diaspora across coastal Malaysia, Myanmar, Thailand, Indonesia and Vietnam.

The Peranakan are also known as the Baba Nyonya and became part of the prosperous Straits Chinese elite, with distinctive language, houses, customs, food and dress. They forged close alliances with Western colonial traders and built business empires and opulent mansions befitting the wealthiest and most influential families in Southeast Asia. This was a flamboyant and sophisticated blend of Chinese, Malay, Indonesian, Portuguese and British influences successfully adapting to its environment for more than four centuries before facing near extinction after the second world war.

During the colonial era they were known as the "King's Chinese" because of their fierce loyalty to the British but the Peranakan paid a price for that allegiance in modern, independent Malaysia, when the indigenous elite realised that, while they might govern the new country, it was the Peranakan who owned it.

This marked the beginning of the retreat of the culture and it would probably be extinct by now if not for the heroic efforts of a few individuals determined to celebrate their heritage, the desire of a new nation to define itself and the unexpected popularity of a television drama.

Perhaps the best known of the individuals still waving the flag tirelessly for Peranakan culture is Michael Cheah. He is widely known as the "Last of the Babas" and lives in Penang, the Malaysian island and former British entrepot at the northern extreme of the Strait of Malacca, the narrow strip of ocean connecting maritime east and west.

Cheah is determined to preserve the Peranakan way of life as a living culture rather than as a museum exhibit or tourist attraction and it is hard to think of a better ambassador for such a colourful jumble of cultures than this histrionic, energetic and loquacious 62-year-old. Cheah is, by his own admission, the "go-to man" in Penang for all things Peranakan.

"I was born in Penang, I live in Penang and will probably die in Penang," says a proud Cheah, armed with a hefty archive of photo albums and CDs containing family portraits going back several generations. "We want to promote our unique culture. It is Chinese but it is also Malay, Thai and Burmese," he says, adding that his ancestors came from Fujian province.

"My great-grandfather was born in Penang but originally the family came to Malacca for trade," says Cheah, who is also a guest curator at the Pinang Peranakan Mansion museum, vice-president of the Penang Peranakan Association and a regular speaker on the 15th-century origins of Baba Nyonya culture.

"The nature of the monsoon trade winds meant that Chinese maritime traders had to stay in Malacca for up to six months waiting for the wind to change direction. They brought silks and porcelain on the maritime silk route and came to Malacca for ivory, abalone and birds' nests, which were all considered highly precious things," he says.

"The men took Malay wives and had children with them. Their trading business was managed by the wife while they were away at sea or back in China. In Malaysia, it is a very matriarchal society and these women were very powerful," says Cheah.

He explains that "Peranakan" is actually quite a recent term and that he prefers to use "Baba Nyonya" to refer to his culture.

"' Baba' is an Anglo-Indian word meaning 'father' and ' nyonya' is a Portuguese word for a young girl," he says, explaining that the former is an honorary term for Peranakan men while Nyonya refers to the women.

Cheah becomes even more animated when talking about the unique fashions associated with his culture. The clothing of the Peranakan reflects a unique blend of cultural influences and is an exuberant assortment of batik, embroidery, beadwork, silks, satins and organdie.

"I buy vintage costumes to use in fashion shows and weddings. To make a new one would cost many thousands of ringgits. One lady just sold me 20 kebayas from the Arab world," he says.

The kebaya is a traditional blouse and dress ensemble native to Indonesia but adapted by the Nyonya with extravagant hand-painted Chinese silks. The baju panjang, meanwhile, is a long dress borrowed from traditional Malay attire. Both are secured by three kerosang (broaches) and are traditionally worn with intricately designed kasut manek (hand-beaded slippers).

Cheah supplies traditional costumes, teaches the beading techniques and has organised more than 300 Baba Nyonya-style weddings. A traditional wedding lasted 12 days but the ceremony has been condensed into a single day, to accommodate modern working lives.

Being to the north of the Strait of Malacca, Peranakan traders in Penang also came into contact with Thai and Burmese women, and these, too, were assimilated into the culture.

Wealthy Chinese men who were not part of the Peranakan community would covet a Nyonya woman as a wife as the match bestowed class, prestige and business credibility.

"My great-grandmother was Thai and my great-grandfather had four wives. It was normal for these Chinese traders to have many wives and it was unusual that my grandfather had only one. This was only because he was married to a tigress and was very afraid of her," says Cheah, with a huge laugh.

While core Chinese values were retained and a unique fusion culture emerged, the Peranakan Chinese elite (rather like the Eurasian and Chinese merchant class in Hong Kong) became very closely allied with the British, who governed the Straits Settlements of Malacca, Penang and Singapore from 1867.

"The Chinese are very pragmatic. They could see the British were the ones in charge so they just sucked up to the masters," says Cheah, with a self-deprecating chuckle. "We were called the King's Chinese because we were Anglophile and our kids went to Oxbridge [Britain's Oxford and Cambridge universities]. Many of my relatives were accomplished jazz musicians," says Cheah, whose father obtained a bachelor of science in chemical engineering at Cambridge University.

"I have only had a British education. I attended the Francis Light School and St Mark's secondary school [both of which are in Penang]. I never attended a Malaysian school. My literary education was Shakespeare, Dickens and Wordsworth," he says, hardly pausing before quoting all three writers to underline the point.

"I don't speak Cantonese or Mandarin, only Baba, which is a local version of Hokkien," he says.

The Peranakan maintained feet in two cultures, he says, in order to progress in business. This is evident in the opulent Pinang Peranakan Mansion, in George Town. The museum is now a Unesco World Heritage site.

"In the Peranakan Mansion you will notice that one public room is British [lavishly decorated in the most fashionable art-deco style of its time] and one is traditional Chinese. Business guests would be taken to the appropriate room. The British would observe how their hosts were very refined while the influential Chinese guests would be reassured that they were not complete barbarians."

He believes Peranakan culture is a tribute to the Chinese people's genius at adapting but he sounds less positive about the future.

"A lot of the younger Chinese will not even know about Baba Nyonya culture. I am very passionate and proud of my culture and also very sad that I have no one to take over from me. I want my knowledge to be shared."

If the future for Peranakan culture in Penang looks a little bleak, what is the situation about 800 kilometres to the south, in the town of Malacca, where it all began?

In the 15th and 16th centuries, long before Europeans arrived in the region, Malacca was a bustling epicentre of Asian trade dominated by the junks of China. At its zenith, Malacca was probably the most cosmopolitan city on Earth and, in the early 15th century, it was an important port of call for Chinese Admiral Zheng He, who was dispatched on a series of voyages with a massive fleet of junks by the Ming emperor to seek tributes for the celestial kingdom.

According to local tradition, in 1459 the Chinese emperor sent princess Hang Li Po and a large court entourage to the Sultan of Malacca, Mansur Shah, to thank him for his generous tributes. Some believe it was this exclusive group of aristocratic Chinese courtiers who provided the original bloodline for the Peranakan, although that's difficult to prove. Most cannot trace their ancestry any further than the founding immigrant patriarchs from Fujian in the 17th and 18th centuries.

Modern Malacca capitalises on its maritime past and Chinese connections for its success as an international cultural-heritage tourist destination. Not surprisingly, Peranakan culture is an important item on the heritage menu and the food is very much part of that offering. Peranakan restaurants offering Nyonya dishes are ubiquitous and the cuisine is an irresistible Chinese interpretation of Malay and Indonesian dishes that are tangy, aromatic, spicy and herbal. A classic example is laksa (a spicy noodle soup), which comes in two variants: the sour asam laksa from Penang and the coconut milk-based laksa lemak from Malacca.

In addition to the restaurants, Malacca has Peranakan hotels, jewellery exhibitions, restored houses, tea shops and, perhaps best of all, an award-winning museum run by Melissa Chan, a sixth-generation Peranakan.

"For me, the culture has become a framework to understanding the past and also future hopes for our nation, so it is very close to my heart," says Chan, dressed in a traditional silk kebaya. She modestly refers to herself as the "housekeeper" of the museum, even though it was her family's ancestral home until her late uncle Chan Kim Lay set up the museum in 1985.

Acquired by the Chan family in 1861, the museum is a typical Chinese mansion of its day. It has a narrow colonnaded street front but extends about 200 feet back, with airy open-air courtyards containing potted plants and carp ponds. The house is lavishly furnished and, like the mansion in Penang, combines traditional Chinese and ornate Victorian-era English styles. There is an ancestral shrine, representing a key part of Peranakan family life retained from China. It is impossible to think of any residential building that compares with it in Hong Kong.

This was the home of Baba Chan Cheng Siew (1865-1919), a man of eclectic tastes and a decadent lifestyle; he was known to have held many a ronggeng night, filled with wine, women and song, in this house, before he died suddenly, at the age of 54.

"Many of these communities formed out of the necessity of early migrants needing to assimilate in a foreign land. It is really the people and the spirit they imbued, the tenacity to survive and thrive, and the adaptability to adopt other cultures and language which I think form the Peranakan spirit and culture," says Chan.

And does she share Cheah's fear that Peranakan culture is becoming confined to museums and tourist trails?

"We have many student tour groups that come through the museum, and the students [around 12 years of age] are all fascinated with the culture and history of the house, so I think the way that the story is presented will help keep it alive. Also, many Singaporeans identify with the Peranakan culture as their historical identity," says Chan.

"There is also a resurgence in the arts, design and culinary aspects, drawing inspiration from the Peranakan identity and, again, this is mostly seen in Singapore," she says.

When the British focused their regional commercial interests in Singapore, many Peranakan businesses followed suit, in the process becoming a dominant group in a very wealthy and small colony. After five decades of tireless focus on economic growth, Singapore is now looking at Peranakan culture as a means of defining itself.

It has even been suggested that the culture is being appropriated by Singapore to create a new national identity, timed to coincide with the 50th anniversary of independence, next year. It is a suggestion firmly rejected by Jackie Yoong, curator of the Peranakan Museum in Singapore.

"I don't think we have stolen Peranakan culture, nor are we claiming it," says Yoong, "but there is a lot of awareness here about the culture."

So how many people in Singapore would claim to be Peranakan or of Peranakan decent?

"That's difficult to say because Peranakan is not a category for the Singapore ID card," she says, pointing out that, although there is a strong Peranakan Association in Singapore, membership is not restricted to Peranakan people.

According to Yoong, in 1911 the British carried out a census in Singapore and Peranakan was included as a racial category. About 20 per cent, or 50,000 Singaporeans, claimed to be Peranakan. Within newly independent Singapore's founding cabinet, 50 per cent of the members were British-educated Peranakan.

"Language, fashion and food are the cultural identifiers," says Yoong, and explains how the culture received an unexpected boost in terms of profile and recognition by the huge success of the 2008 TV series The Little Nyonya, which was made in Putonghua and then dubbed into Malay. The engaging historical drama consisted of biographical flash-backs to three Peranakan families living in Malacca over a 70-year-period and became a big hit, first in Singapore, then internationally.

So is the Peranakan culture in Singapore not in terminal decline, as Cheah fears it may be in Penang?

"Culture is about change," says Yoong, who has worked with Cheah many times. She points out that as well as collecting artefacts at the museum, it produces exhibitions based on contemporary dramas written by successful Peranakan playwrights.

"Even the prime minister [Lee Hsien Loong], who opened the museum [in 2008], claims to be Baba," says Yoong, who thinks a Peranakan ethic is deeply embedded in Singaporean culture and suggests the celebration of the city-state's half-century of independence will mark a significant revival for Peranakan culture.

"My view is that the Peranakan were comfortable with a hybrid society and flexible enough to work with all types of people," she says.

While Cheah may still fear for the future of his cultural identity in Penang, and while it may primarily represent little more than a Unesco-sanctioned tourist attraction and gourmet experience in Malacca, Peranakan culture is alive and kicking. It also offers a tangible reminder of the days when China ruled the seas of Southeast Asia, not by crude naval firepower but through commercial guile and the ability to subtly integrate with foreign cultures without effacing their core ethnic identity.

And thanks in no small measure to a popular TV drama and a young city-state's need to establish some sense of national identity, we have not yet seen the last of the Peranakan.