Description
Book SynopsisPresents the truth behind the rise of China and whether or not it will be able to maintain it. This book looks at the social and political consequences of the unique business model that propelled China to economic powerhouse status, and question whether this rapid ascension really lives up to its reputation.
Table of ContentsPreface to the Second Edition xi Preface to the First Edition xvii
List of Abbreviations xxi
1. Looking Back at the Policy of Reform and Opening 1
Thirty years of opening up: 1978–2008 2
Thirteen years of reform: 1992–2005 10
The end of reform: 2005 15
China is a family business 22
2. China’s Fortress Banking System 27
Banks are China’s fi nancial system 29
China’s banks are big banks 31
Crisis: The stimulus to bank reform, 1988 and 1998 33
China’s fortress banking system in 2010 41
The sudden thirst for capital and cash dividends, 2010 47
3. The Fragile Fortress 53
The People’s Bank of China restructuring model 56
The Ministry of Finance restructuring model 66
The “perpetual put” option to the PBOC 73
The new Great Leap Forward Economy 76
China’s latest banking model 82
Valuing the asset management companies 85
Implications 88
4. China’s Captive Bond Market 95
Why does China have a bond market? 98
Risk management 102
The base of the pyramid: Protecting household depositors 116
5. The Struggle over China’s Bond Markets 125
The CDB, the MOF, and the Big 4 Banks 126
Local governments unleashed 134
Credit enhancements 141
China Investment Corporation: Linchpin of China’s financial system 145
Cycles in the fi nancial markets 158
6. Western Finance, SOE Reform, and China’s Stock Markets 163
China’s stock markets today 164
Why does China have stock markets? 168
What stock markets gave China 172
7. The National Team and China’s Government 185
Zhu Rongji’s gift: Organizational streamlining, 1998 186
How the National Team, its families, and friends benefit 196
A casino or a success, or both? 209
Implications 212
8. The Forbidden City 215
The Emperor of Finance 217
Behind the vermillion walls 220
An Empire apart 227
Have the walls been breached? 231
Cracks in the walls 235
Imperial ornaments 239
Appendix 245
Select Bibliography 249
Index 251
