In this extremely stimulating and controversial account of China's economic progress, the authors advocate a strong role for the government in directing financial reforms, a position that runs against the orthodox advice offered by most international agencies. They contend that there is an East Asian model of development, exemplified by South Korea and Taiwan, but also including Japan, where high rates of growth have been achieved because the state has played a substantial role in owning financial institutions, administering interest rates and directing credit. Control of the financial system, they contend, played a crucial role in promoting the structural transformation of the economy and was a central component of a highly effective pattern of state-directed development.
Whether or not one accepts the analysis and its implications for China, and the case is quite convincing, the authors provide a lucid and scholarly analysis of the financial reform process in China, thus filling a substantial gap in the research on the Chinese economic reform process.
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