Tag: Jiang Zemin

Unless the country’s economic management evolved, there was a risk of stagnation, Overholt said, describing the thesis in his new book China’s Crisis of Success. Second, the whole economy finds itself over-leveraged. And as powerful interest groups pushed on policy, so politics was also transformed. To overcome such problems, a country needed both an economic plan and a political plan, Overholt said. The plan would subject state-owned enterprises to market-based reforms, but this “steps on the toes of every power group in China”, he said. The optimistic result: Economic reform is successful and the country then turns to fixing the politics. But interest groups had become stronger, richer and increased the political problem, he said. Economic reform does not happen. Interest groups took control of the government protected themselves against both domestic and foreign competition, leading to a long period of economic stagnation. If they’re not successful with economic reform, they’ll have a bigger political problem”.