Download - The Political Economy of China's Financial Reforms: Finance in Late Developmentby Paul Bowles
The Political Economy of China's Financial Reforms: Finance in Late Development by PaulBowlesReview by: Donald ZagoriaForeign Affairs, Vol. 73, No. 4 (Jul. - Aug., 1994), p. 182Published by: Council on Foreign RelationsStable URL: http://www.jstor.org/stable/20046807 .
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Recent Books
the danger of a wider war. Stalin was pru
dent, and he feared getting involved in
a wider war with the United States. But
after April 1950, according to a Soviet
diplomat who had access to the archives, Stalin "for some reason changed his mind
and began to push for a military solution
very actively." What is not clear from this
volume is why Stalin changed his mind.
On this critical point, the authors are
reduced to speculation. They pile expla nation on explanation, most based on
conjecture about Stalin's motivations.
This is not to detract from their achieve
ment. This volume assembles a great deal
of information and will be essential read
ing for historians who follow the subject. The final word on Stalin's motivations
for changing his mind in April 1950, if indeed that was the case, will have to
await the opening of the Stalin archives.
One final point: students of deterrence
theory will find nothing here to contra
dict their long-held view that the U.S.
failure to include Korea in the U.S.
defense perimeter helped convince the
prudent Stalin that he could achieve a
major victory without great risk. Stalin
was constantly scrutinizing U.S. policy for signs of resolve or a lack thereof.
Thus, if the United States had taken a stronger line on the importance of
defending Korea in early 1950, the
Korean War might have been averted.
The Political Economy of Chinas Financial
Reforms: Finance in Late Development. by pa?l bowles. Boulder: Westview
Press, 1993, 206 pp. $49.95. In this extremely stimulating and contro
versial 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 con
tend 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 finan
cial 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 analy
sis 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.
Keiretsu: Inside the Hidden Japanese
Conglomerates, by kenichi miyashita
and david w russell. New York:
McGraw-Hill, 1994, 225 pp. $22.95. An American business journalist based in
Japan and his Japanese counterpart deliver
a wealth of information about the mam
moth corporate alliances that lie at the
heart of the Japanese business system.
They begin by observing how ignorant most American companies are about their
Japanese competitors, and they reflect on
the fact that so many U.S. corporations are not studying business as thoroughly and systematically as the Japanese. To the
Japanese, this is carelessness, and careless
ness is one step away from failure.
[182] FOREIGN AFFAIRS - Volume73No.4
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