EPUB EBook by Carl E. Walter
EBook DescriptionChina is a long way from the days where there was only one bank (a minor sub- EPUBministry of Mao's government apparatus) and the foreign currency reserves totaled some $38,000. Red Capitalism EPUB EBook Their economic rise, which seemed miraculous, is now thought of as inevitable, and one where the West and America have nothing but a diminished role to play.
The continued rise, aruges the authors, is a paper tiger. A correction to the cycle may yet come sooner than we think.
It's terribly difficult to make financial terminology readable, especially with a snarled and byzantine system as the Chinese. But there are some deeply disturbing trends laid bare here.
It is very easy to become enchanted simply with the volume and increasing rate of financial transactions. But once you try and follow the money, you have no idea where the rabbit hole goes.
Some brief points, as provided by the authors:
-China has the appearance of a free market economy, protected by the authoritarian state. However, liberalization has only been allowed where it is either controlled by, or directly benefits, the state.
-The Chinese banking system is held together not just by the saving habits of the citizens, but due to excessive government protection. Most were barely saved from collapse in 2006 due to some shrewd inter-governmental maneuvering.
-Many loans made by the banks are politically oriented. Instead of gradual adjustments in capital banking, they require huge drives.
-Government sponsored asset-management companies are responsible for 'hiding' extremely large instances of debt.
-Bonds do not play as much of a role in the market as the banks do.
-IPOs and the benefits of privatization still primarily benefit those most connected to the party apparatus.
The genius of Deng's reforms was his pragmatism - his successors, however, have turned this into a means by which the party bosses benefit, and only reform if necessary. Only a few bold ministers dare call for reform and a truly freer market with sensible regulation.
Yet after the crisis of 2008, the state has retreated further from any calls of reform. It remains to be seen if the unique Chinese model can withstand any future shocks which may come. Like this book? Read online this: Social Policy of the Economic State and Community Care in Chinese Culture, After Capitalism.
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