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Entrenched corruption turned an economic issue into a political one, weakening the already diminished public perception of the Communist Party and its legitimacy.

Growth only compounded existing inefficiencies, and by the time the Chinese government started to get a grip on the actual economic condition, massive restructuring clearly was necessary to bring about a more sustainable economic system.

A B a n k i n g C r i s i s a n d Te x t i l e Wa r Beijing already seeks a way out of its commitment to banking reform — even as it seeks foreign investors and partners for its state banks.

Hu has the difficult challenge — putting them into effect.

Under this system, the central government handed down quotas, and each successive layer of bureaucracy claimed ever more exaggerated achievements.

The communist economic model brought two key aspects — strong centralized planning, which undermined creativity and entrepreneurship, and a culture of avoiding the truth.

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On May 20, China responded by raising export tariffs on some 74 products.

Armed with powerful intelligence-gathering capabilities and working in close collaboration with STRATFOR’s experienced team of professionals, our clients are better able to protect their assets, diminish risk, and increase opportunities to compete in the global market. They also represent manifestations of Beijing’s attempts to hold external pressures at bay and to find some way to restructure its domestic social and economic situation without triggering the massive upheaval that often heralds Chinese dynastic changes.

And it sees itself as Asia’s rising political star — the great power to challenge the United States, at least in one region.

On May 13, Washington imposed quotas on three categories of Chinese textile products and said May 18 it would enact more.

On April 4, Washington announced a 90-day investigation into three categories of Chinese textiles — a move followed two days later by the European Union’s announcement of plans for trade protection measures on a dozen categories of Chinese textiles.


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