Word: change
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...Chang proposes other possible triggers of collapse, including a failed P.R.C. attempt to invade Taiwan. But he bases his central prediction on a WTO provision: two years after China's accession, foreign banks will be able to conduct business in the local currency with domestic corporate customers. Three years later, hundreds of millions of Chinese with household deposits already totaling close to $800 billion will also be able to choose between a Chinese and a foreign bank. But the Chinese banks that now hold this money have been lending it, on Beijing's instructions, to largely moribund state-owned enterprises...
...will not remain silent forever. Inevitably, the Internet will carry rumors that China's big four banks?the Bank of China, China Construction Bank, Industrial and Commercial Bank of China and the Agricultural Bank of China?are in trouble. "That's when the revolution will begin," Chang writes. He asks a rhetorical question which, as he sees it, Chinese will have to confront from 2006 on: "Now that you have a choice (will you) keep your money with an insolvent institution or one that can pay you back?" The answer?like most of this book's conclusions?is simple...
...book is timely. Chang, an American-born Chinese, has lived and worked in China for almost two decades, most recently as a Shanghai-based lawyer in a leading U.S. firm. But this is not a work of serious sinology. Most of his anecdotes appear to have been gleaned from media reports, including those from television. The book more closely resembles a lengthy, impassioned address prepared for a law-school debate...
...debate adjudicator might give Chang good marks for summarizing succinctly much of the economic swamp that China is currently wading through. But by pinpointing the year and circumstances of counterrevolution, Chang risks derision. The Chinese are no slouches at barbarian management, and Western banks are nothing if not monuments to self-interest. If a catastrophic, WTO-triggered bank run seemed imminent, it is hard to believe that the principals wouldn't collaborate to contain...
...Should Chang's entire thesis be discarded? Maybe not. As Sidney Webb, a Fabian Society co-founder, once said: economists are "generally right in their predictions, but generally a good deal out on their dates." China's command capitalism is currently a mess, and repeated failures to sort it out could conceivably destroy public order one day. Perhaps Chang will be proven right?if we, including especially those party Neanderthals, wait long enough...