China's Crisis of Success

by William H Overholt

China's Crisis of Success provides new perspectives on China's rise to superpower status, showing that China has reached a threshold where success has eliminated the conditions that enabled miraculous growth. Continued success requires re-invention of its economy and politics. The old economic strategy based on exports and infrastructure now piles up debt without producing sustainable economic growth, and Chinese society now resists the disruptive change that enabled earlier reforms. While China's leadership has produced a strategy for successful economic transition, it is struggling to manage the politics of implementing that strategy. After analysing the economics of growth, William H. Overholt explores critical social issues of the transition, notably inequality, corruption, environmental degradation, and globalisation. He argues that Xi Jinping is pursuing the riskiest political strategy of any important national leader. Alternative outcomes include continued impressive growth and political stability, Japanese-style stagnation, and a major political-economic crisis.

Genres: China, Politics, Nonfiction, Economics

302 pages, Paperback

Published February 7, 2018

Reviews

[Mike · Rating 4 out of 5]

Unique perspective on China

The author has spent most of his career connected with China in one way or another and this is a set of thoughts/ideas on why China has been successful and where it might be headed. The analysis of why China has been successful (following the East Asian statist export-oriented model) is spot on and I like the fact that he does a convincing job attacking the idea that democratic institutions would have performed better (I very much doubt this). But his analysis of the future is flawed on a number of dimensions - (a) he does not think about geography enough in comparing Taiwan, South Korea and Japan with China and geography is critical in thinking about all sorts of issues for China, (b) he seems obsessed with trying to show China is better than India and that is almost beside the point and not relevant, (c) he overstates the value of Chinese infrastructure investment and underplays the macroeconomic adjustments required (the Michael Pettis arguments are not really apparent in his 10 or so key contradictions), (d) he overvalues the current Chinese strategy (calling it “brilliant”) yet admitting in the end that nothing really is clear, (e) he says much is uncertain about the future yet does not spend a lot of time discussing the various scenarios for the future he introduces.

If someone asked me for a book to describe *why* China has been successful, this is it. If someone asked me for a book on China’s future, I’m not convinced that this is the book.

[Jack · Rating 4 out of 5]

This is the best book I've read so far on China (but I've never read Martin Jacques). Especially in the earlier parts of the book, the author presents a nuanced view of Chinese economic development that I thought was very useful. The government has done exceptionally well after Mao, and even though there are current problems there's still a lot of potential. He looks at the statistics about how the Chinese people have been raised out of poverty, and how Chinese people now have vested interests in their society through homeownership. It's very impressive. He also points out that autocratic governments are better for early-stage economic development, which is very hard to disagree with--especially in the context of the "Asian Miracle Economies" that he characterizes as being almost perfect situations for economic growth.

Criticism of this book are right in that Overholt seems to focus a bit too much on the government's responsibility for economic development. Technocrats can't do everything, and people and technology matter too. He also doesn't do a fantastic job keeping his mind open about the future, and his takes on what China might become are relatively tepid and obvious. Still, very worth reading and the first half of the book was excellent. He has many good insights on Asia from his career, albeit sometimes slightly dated ones.

[Chen Ann Siew · Rating 5 out of 5]

Best book read on China since Martin Jacques' "When China Rules The World". Excellent analysis of China's current political and economic situation. Few key takeaways - (i) CCP recognises that China's current political structure isn't final and like its economic condition, is a work in progress (ii) Xi didn't acquire power, such power was given to him, to address the problems which China is now facing. Question is, who are these people / collective leadership which gave him the power (which also means power could be taken away from him if he doesn't perform) (iii) western style liberal democracy does not work in developing economies (not new) (iv) China's economic development thus far was modelled in varying degrees against those of Japan, South Korea, Taiwan and Singapore (v) these economies offered different alternatives of political structures which China may learn from, but current political leadership seemed more inclined to tighten CCP's control. Also, while the book is largely on China, the author wrote quite a bit about developments in several Asian economies, including in his words the miracle societies (Asian tigers ex-HK + Jpn) and near-miracles (Malaysia, Thailand, PH, Indonesia).

[Neil H · Rating 5 out of 5]

Its refreshing to read objectively on the evolving conditions which lead China at the start of Deng's brave decision to open a chapter in China's recent tragedy with Mao's agrarian experiments to integration economically with the world. Through the years, western pundits have decried the centralised, autocratic top down repressions prevalence akin to Mao's dominant hand without giving credit to the enormous changes that was driven from a relaxation for bottom up peasant growth in creativity and economic aggressiveness in the initial stages. As a Singaporean, I get the inspirations which we have collaborated with China in economic and policy reforms. Singapore has worked remarkably well with the selflessness of Lee Kuan Yew and what William O. does superbly is provide a western author's view that we need to look at the conditions and comparisons which China selectively uses the best economic practices applicable to its environment; people, political, social, cultural with one aim in mind - economic progress in such a scale to alleviate poverty never seen in history.

A different scenario emerges when a turbo charged economy spews a middle class in slightly more then a generation. The challenges of stable, economic pursuit as continues, coupled with identity and hubristic awareness of potential continued wealth from its masses demands the CCP regard what conditions motivate prior cannot be applicable to the more vocal population.

I took this sobering quote "Either economic failure or economic success will eventually bring political modernization to the top of the agenda" for complacency and loss of regard to the citizens as potentially destabilizing. Can China be a vanguard of/for its people?

[Thaqif Ismail · Rating 4 out of 5]

"Ideology is the great enemy of grounded thinking." - William Overholt (in-book quote).

"When you are studying any matter, or considering any philosophy, ask yourself only what are the facts. Never let yourself be diverted either by what you wish to believe, or by what you think would have beneficent social effects if it were believed." - Bertrand Russell, interview about what message he would leave to future generations (in-book quote).

Author William Overholt begins the book not with an overview of China, but interestingly with a general critique of positivists social scientists and their "fetishisation" of methods. As a student of Political Science myself, this was initially hard to swallow given my four years of academic training in the positivist tradition. His critique though is valid after deeper analysis.

From the numerous regression models that fill unread political science journals, to the almost ideological beliefs held by academia in foundational "theories" of governance; Overholt cuts through all that academic jargon by placing a premium on the facts and a simplified communicative style.

It is certainly a book worth reading for any trained social scientists, though it might get a bit pedantic at times due to the lengthy historical narrations.

[Niels Bergervoet · Rating 3 out of 5]

At the start I really liked the book, because it gives a more nuanced view of China than most articles and books. Overholt analyzes China by comparing it to other Asian succes stories. And he is full of praise for all the succeses China has already achieved. But the further I got, the feeling creeped up on me that Overholt is missing something. Because his view is really narrow. According to him everything is governance. China is succesful because it is governed well and it will stay so if it is governed well. If China fails, it is because it was not governed well. Yes, governance is really important, maybe even the most important factor in the succes of a country, but he forgets that even well governed countries can fail (for instance because of unstoppable demographic changes) and that what seems like good govermance now is bad governance in hind sight. And besides that, Overholt seems a bit too much in love with China's technocratic, pragmatic approach. So overall an interesting book on China, but not as objective as the author thinks.

[Thomas O'Toole · Rating 5 out of 5]

This is an excellent book. It lays out in detail the reasons for China's advances in the last 30 years and the barriers to China's further development. It is very readable.