Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise

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John Wiley & Sons, Jan 19, 2011 - Business & Economics - 250 pages
13 Reviews
In Red Capitalism, Carl Walter and Fraser Howie detail how the Chinese government reformed and modeled its financial system in the 30 years since it began its policy of engagement with the west. Instead of a stable series of policies producing steady growth, China's financial sector has boomed and gone bust with regularity in each decade. The latest decade is little different. Chinese banks have become objects of political struggle while they totter under balance sheets bloated by the excessive state-directed lending and bond issuance of 2009.

Looking forward, the government's response to the global financial crisis has created a banking system the stability of which can be maintained only behind the walls of a non-convertible currency, a myriad of off-balance sheet arrangements with non-public state entities and the strong support of its best borrowers--the politically potent National Champions--who are the greatest beneficiaries of the financial status quo.

China's financial system is not a model for the west and, indeed, is not a sustainable arrangement for China itself as it seeks increasingly to assert its influence internationally. This is not a story of impending collapse, but of frustrated reforms that suggests that any full opening and meaningful reform of the financial sector is not, indeed cannot be, on the government's agenda anytime soon.

  

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Review: Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise

User Review  - Erez Davidi - Goodreads

Even though this book is rather short, the authors were able to cover a vast amount of different issues regarding China's financial markets and banking system. However, the two most alarming points ... Read full review

Review: Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise

User Review  - Alberto - Goodreads

3 or 4 stars Does a good job of explaining China's unique blend of capitalist mechanisms and state planning. Ultimately you come away with the understanding that, since the state controls all the ... Read full review

Contents

Preface
Chinas Fortress Banking System
The Fragile Fortress
Chinas Captive Bond Market
The Struggle over Chinas Bond Markets
System
Western Finance SOE Reform and Chinas Stock
The National Team and Chinas Government
The Forbidden City
Select Bibliography
Copyright

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About the author (2011)

Carl E. Walter lived in China for twenty years and actively participated in numerous financial reforms. He played a major role in China's groundbreaking first overseas IPO in 1992, as well as the first listing of a state-owned enterprise on the New York Stock Exchange in 1994. He was a member of the Management Committee at China International Capital Corporation, China's first and most successful joint venture investment bank, where he supported a number of significant domestic stock and debt underwritings for major Chinese corporations. More recently, he helped build one of the most successful and profitable domestic security and currency trading operations for a major global investment bank. Fluent in Mandarin, he holds a PhD from Stanford University and a graduate certificate from Beijing University. He currently lives in New York where he acts as an independent consultant.

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.

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