On May 30, 2011, the Asan Institute for Policy Studies hosted its 3rd Asan Dosirak with Experts series with Dr. William Overholt of Harvard University’s Kennedy School of Government.
Dr. Overholt’s talk, entitled Northeast Asia After Financial Crisis, and his responses to questions offered by participants covered a wide range of topics and a number of critical issues for contemporary Northeast Asia. Dr. Overholt examined the rise and disappearance of crisis mobilization systems practiced by Asian nations and the global surge of best practices. Japan had already shown signs of slow growth in 1975, as it began to close herself to global competitions and openness. Such a phenomenon of systemic sclerosis in Japan was largely due to a peculiar political system and a receding sense of urgency in the population.
In contrast, thanks to timely and persistent initiatives by Deng Xiaoping and Zho Rongji, China’s mobilization system succeeded in maintaining momentum favorable to sustained high-growth. Dr. Overholt rejected the claim that China’s future will be similar to Japan’s slow decay because China today is far more globalized and competitive than Japan of the past. He pointed out that the key to China’s continuous ascension in the world economy was re-invigorating its reforms to assert market-treatment of state-owned enterprises (SOEs).
South Korea has also been an exemplary case of emulating best global practices by keeping herself open to international competition and exchange. Thanks to its industrial sophistication and prowess as a result of its successful crisis mobilization, its image today is not one of a small country sandwiched between big powers, but the most nutritious and tasteful part in the middle of the sandwich.
Regarding the prediction of a ‘Jasmine revolution’ taking place in China, Dr. Overholt asserted that the chance for that is extremely low for a few reasons. First, Chinese academics and students generally view their government in a positive light; Chinese people would not want to trade human rights for living standards (life expectancy in China has been improved from 41 years in 1955 to 73 today); SOEs are highly profitable; its system is highly internationalized (78% of university presidents hold their terminal degrees from overseas; and that number is 81% for the members of the Academy of Sciences). He argues that, compared to Japan in late 1980’s, there exists little risk of a financial bubble burst in today’s China.