The Rise of China: How Economic Reform is Creating a New Superpower

A look at the history of China's economy discusses the contrast between China's success and the former Soviet Union's failure and argues that its economic explosion will continue

China, the world's fastest growing economy, is eliminating poverty while achieving huge trade surpluses and creating a vast new class of consumers open to liberal ideas, reports Overholt, managing director of Bankers Trust in Hong Kong. His detailed economic and political analysis portrays Deng Xiaoping as a master strategist who is using rapid economic growth and gradual privatization to build a consensus around stability, arguing that an immediate move towards a Western market-style economy would likely be disastrous for the People's Republic. Overholt, who cofounded the journal Global Political Assessment with Zbigniew Brzezinski, maintains that the U.S. should pressure China for reforms of its trade policy, arms sales and human rights abuses but still grant the country most-favored-nation trade status. Continuing along this path of economic development will create an educated citizenry and wider freedoms, contends Overholt, and provide the best hope for transforming authoritarian China into a democracy.
Copyright 1993 Reed Business Information, Inc.

A bullish report on China's explosively growing economy, predicting that the development of Chinese capitalism will effectively end Chinese Marxism. Overholt (manager director of Bankers Trust Company in Hong Kong) notes that ever since economic reform was introduced in 1979, China's economy has grown at a rate of 9.3 percent annually despite the country's lip service to Marxism--and that at the same time, former Soviet and Warsaw Pact countries, which renounced Marx and introduced democracy rapidly, have veered dizzyingly close to economic catastrophe. In Russia, he says, the competing demands of pressure groups have paralyzed the central government and made it impossible for the country's leaders to make the hard decisions necessary to permit economic growth. In China, though, economic reform had the support of the military, who emerged from the 1979 war with Vietnam intent on acquiring Western military technology- -and so, like other Pacific Rim autocrats but unlike Western politicians, Chinese leaders didn't link economic reform with representative democracy or progress in human rights. But contrary to what Deng Xiaoping may have intended, Overholt says, the quick increase in national wealth perforce led to gradual liberalization. The author foresees a bright future for China as its people (who constitute one fifth of the human race) begin to vie with Japan for economic supremacy in Asia--a development, Overholt argues, that ``is transforming the political structure of the entire globe.'' The author also notes the critical significance of the US-China relationship for world peace, and recommends that US leaders bring to it both understanding and pragmatism. A timely report on the growth of the world's most dynamic economy, as well as a forceful argument that, often, successful political reform can follow only in the wake of--or alongside with- -economic reform. -- Copyright ©1993, Kirkus Associates, LP. All rights reserved.

Many Americans believe China will collapse just like the regimes of Eastern Europe. All Communist economies are fundamentally flawed, aren't they? Overholt, the director of a Hong Kong bank, argues that, to the contrary, China is on the verge of economic explosion. He believes that the Chinese economic reform under communism will succeed where similar Soviet efforts failed because the Chinese are proceeding with reforms slowly, which brings stability, while Gorbachev tried to change the Soviet Union all at once. In Poland's Jump to the Market Economy ( LJ 10/15/93), Jeffrey Sachs presents the opposite view, advising the new Eastern European leaders to "jumpstart" their economies quickly. Both viewpoints have their supporters. Whichever is eventually proven correct, Overholt's book (as well as Sachs's) belongs in any academic collection as representative of current thought.
- Kris Swank, American Graduate Sch. of International Management Lib., Glendale, Ariz.
Copyright 1993 Reed Business Information, Inc.