ABSTRACT
The Asian crisis provides a timely occasion to re-examine taken-for-granted assumptions about the strength and uniqueness of “Chinese” capitalism in the age of globalization, with its special networks based on various guanxi ties (Menkhoff and Labig 1996) and organizational behavior founded on Confucian familyoriented value systems (Redding 1990; Weidenbaum 1998). While some analysts believe that the malaise has revealed the “downside” of economic globalization and global market forces, others such as Madison (1998: 5) have stressed that it would be misleading to interpret the Asian crisis as evidence of the failure of global capitalism. Rather, it demonstrates the failure of capitalism to be “truly global.” As Madison puts it, the crisis has exposed certain “foundational defects” of East Asian economies and their corporate sectors such as:
… poor regulation of the economy, lack of transparency in government bookkeeping, a corporate culture that valued neither financial transparency nor stockholder accountability, insider trading, low productivity and inefficient use of capital and labor, industries run less for the sake of turning a profit than for enhancing the power of their directors, over-reliance on export in relation to domestic consumer spending, over-guaranteed and under-regulated banks, soft bank lending practices and a dysfunctional relation to capital, even outright fraud on the part of major banks and financial institutions, opaque systems of crossownership, an incestuous relation between governments, banks and highly indebted companies (e.g. South Korea’s chaebols), nepotism, cronyism, influence-peddling, and corruption, a reluctance on the part of the governments to let large floundering companies go bankrupt, a failure, even, to have properly designed bankruptcy laws, labour market rigidity, a lack of democratic openness, an over-reliance on technocratic elites and a lack of social safety nets.
