Factions and Finance in China: Elite Conflict and Inflation

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Figures......Page 11
Acknowledgments......Page 13
Abbreviations......Page 17
1 Introduction......Page 19
Not Quite a Miracle......Page 20
The State, Bureaucracy, and Financial Outcomes......Page 25
Inflationary Cycles and the Impetus for Reform in China......Page 28
Methodology......Page 33
Inflation, Efficient Intermediation, and Long-Term Growth......Page 39
Inflation......Page 42
Nonperforming Loans and Inefficiency......Page 44
Implications......Page 47
3 The Banking System: Flexible Institutions and Party Domination......Page 48
General Characteristics......Page 49
Controlling Money Supply......Page 50
Credit Allocation......Page 55
The CCP\'s Dominance over the Banking Industry......Page 57
The 1980…1998 System: Decentralized Administration and Monitoring......Page 58
A New Centralization: Bank Structure after the 1998 Change......Page 60
Conclusion......Page 63
Power Seeking in an Uncertain Environment......Page 65
Factions and Political Survival......Page 68
Two Types of Factions, Two Strategies, Two Outcomes......Page 72
A Model of Inflationary Cycles......Page 76
Conclusion......Page 80
5 Factional Politics, Distribution of Loans, and Inflationary Cycles: Several Quantitative Tests......Page 82
The Existence and the Distributional Effects of Factions......Page 83
Measuring and Coding Factions......Page 84
The Model......Page 86
Factions and Inflationary Cycles......Page 92
The Inflation Models......Page 93
The Lending Models......Page 97
The Output Models......Page 99
Summary......Page 102
6 The Collapse of Discipline: The First Two Inflationary Cycles and the Fiscalization of Chinese Banks......Page 104
The Main Actors and their Factions: The Deng-Chen Dichotomy......Page 105
Deng and His Faction......Page 106
Chen\'s Faction......Page 108
From Unity to Contradiction: The Deng-Chen Split and the First Inflationary Cycle......Page 109
The Beginning of the Split......Page 110
Deng\'s Triumph and the Onset of Inflation......Page 114
The Planners Strike Back: Inflationary Crisis and Retrenchment......Page 117
The Failure of Deng\'s Counteroffensive and Continual Retrenchment......Page 121
\"Bogaidai\": The Slippery Slope toward a Fiscalized Banking System......Page 124
A Classic Inflationary Cycle: 1983-1986......Page 127
From Growth to Decentralization and the Impetus for Inflation......Page 129
Inflation and Retrenchment......Page 134
The First Wave of Nonperforming Loans......Page 138
Conclusion......Page 140
7 The Height of the Politics of Inflation, 1987-1996......Page 142
Severe Tests: On the Edge of Hyperinflation and Tiananmen, 1987–1990......Page 143
The Intellectual and Political Basis of the Inflation Debate......Page 145
The Inflation Debate......Page 149
The Price Reform Trap......Page 151
Tiananmen......Page 154
A New Generation of Central Bureaucrats and the Southern Tour, 1991–1996......Page 157
Macro-Adjustment Power......Page 158
The First Southern Tour and the Rise of Zhu......Page 160
The Second Southern Tour and Inflation......Page 164
The Making of a New Economic Tsar......Page 169
The Continuation of the Two Tendencies......Page 177
8 The Long Cycle: 1997-2006......Page 179
Crisis and Command: Zhu\'s Centralization Drive......Page 180
The Calculus of Succession......Page 181
Asian Financial Crisis and Zhu\'s Preemptive Strike......Page 182
The Height of Central Power and Stagnant Banking Reform......Page 188
The Woes of Centralization: Deflation......Page 196
A \"Well-Off Society\"......Page 200
Politics and Retrenchment......Page 203
Conclusion......Page 207
9 Concluding Discussion......Page 208
The Pressure of Globalization and Reform Impetus......Page 209
Power in Authoritarian Regimes......Page 212
Appendix on Data......Page 219
Bibliography......Page 223
Index......Page 255