A Great Leap Backwards?

Victor Shih, a prof at Northwestern in Chinese Politics, is worried about the new Chinese stimulus plan. His basic concern is this: over the past decade there have been substantial regulatory reforms that have divorced bank lending decisions from political influence resulting in a drop in non-performing loans (though I wonder if the stats he quotes are 'real'). With the massive new injections of capital and political pressure on banks to lend, and authoritarian governments being the way they are, Shih worries that this will be a return to the past - in both practice and culture erasing a decade of hard fought gains.

With the West in the midst of the wholesale restructuring of their own financial services sectors, any criticsm is bound to fall on deaf ears. Of course one hopes the rest of the world isn't in the process of following China's lead.