Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise
260
Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise
260Hardcover(Revised Edition)
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Overview
How did China transform itself so quickly? In Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise, Revised Edition Carl Walter and Fraser Howie go deep inside the Chinese financial machine to illuminate 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.
All eyes are on China, but will it really surpass the U.S. as the world's premier global economy? Walter and Howie aren't so certain, and in this revised and updated edition of Red Capitalism they examine whether or not the 21st century really will belong to China.
- The specter of a powerful China is haunting the U.S. and other countries suffering from economic decline and this book explores China's next move
- Packed with new statistics and stories based on recent developments, this new edition updates the outlook on China's future with the most cutting-edge information available
- Find out how China financed its current position of strength and whether it will be able to maintain its astonishing momentum
Indispensable reading for anyone looking to understand the limits that China's past development decisions have imposed on its brilliant future, Red Capitalism is an essential resource for anyone considering China's business strategies in today's extremely challenging global economy.
Product Details
| ISBN-13: | 9781118255100 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 03/06/2012 |
| Edition description: | Revised Edition |
| Pages: | 260 |
| Product dimensions: | 6.20(w) x 9.10(h) x 1.10(d) |
About the Author
Fraser J. T. Howie studied Natural Sciences (Physics) at Cambridge University and Chinese at Beijing Language and Culture University. For nearly twenty years he has been trading, analyzing, and writingabout Asian stock markets. During that time he has worked in Hong Kong, trading equity derivatives at Bankers Trust and Morgan Stanley. After moving toChina in 1998, he worked in the sales andtrading department of China International Capital Corporation followed by a stint with China M&A Management Company. He has contributed to the SCMP, AWSJ, China Economic Quarterly,and China Economic Review as well as being a regularChina commentator on CNBC, BBC, Al Jazeera, and Bloomberg. Currently, he is a Managing Director at a leading Asia Pacific Brokerage firm in Singaporehelping international investors invest in both the Indian and Chinese markets.
Table of Contents
Preface to the Second Edition xiPreface 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 financial 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 financial 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
What People are Saying About This
Carl Walter and Fraser Howie debunk a number of common myths about China's financial markets in this excellent new book. Investors stuffing their portfolios with China stocks would be wise to heed their warnings on the fragile foundations of China's banking system. The authors have done their homework, digging beneath the surface of China's financial world to reveal uncomfortable truths about a financial system riddled with hidden landmines that threaten to undermine China's hard fought economic success in the years ahead.
—Rick Carew, Former Asia M&A Reporter, The Wall Street Journal
In Red Capitalism, Carl Walter and Fraser Howie give a powerful, albeit controversial explanation of the fragile underpinnings of the financial edifice that financed the seemingly unstoppable rise of China on the global stage-which is all the more persuasive thanks to their careful mining of the data. Their thesis that China has the trappings of a market system but not the substance should be considered by anyone dealing with or investing in China-categories which embrace most of the world today. Their contention that China ultimately is a "family business" explains much that is puzzling to outsiders.
—Henny Sender, Chief Correspondent, International Finance, Financial Times
Red Capitalism is a superb guide to China's financial labyrinth. It's a must-read for anyone who wants to understand the sources of Chinese economic power, and the threat posed by the nation's vast hidden debts.
—Arthur Kroeber, Editor, China Economic Quarterly
Finally, a way into the world's most important and least understood financial system. For insight into how China's economy actually operates, begin here!
—Thomas Easton, Asia Business Editor, The Economist
A penetrating analysis that demonstrates how hard it is to follow the old adage "follow the money", and how rewarding it is to understand what will really drive China into the future.
—Christian Murck, President, American Chamber of Commerce in China
Walter and Howie put the Chinese financial system under the microscope to examine how an absence of leadership, institutional squabbling and complacency have seen appetites for reform sputter out, and replaced by stagnation and dysfunction. Theirs is a fascinating, entertaining and necessary corrective to the hyperbole surrounding China's seemingly-miraculous rise.
—David Wilder, Beijing Bureau Chief, Market News International
Walter and Howie's penetrating study addresses a critically important issue in China's political economy. They possess a rare depth of experience in the analysis of the Chinese financial sector. Their hard-hitting conclusions, based on a wealth of empirical research, will stimulate debate about the future of the Chinese financial system at a critical point in its evolution.
—Peter Nolan, Sinyi Professor, Judge Business School, University of Cambridge
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