Vic­tor Shih: Stu­dent of China’s in­ner work­ings BIO

China Daily (Canada) - - PEOPLE - By CINDY LIU in Los An­ge­les cindyliu@chi­nadai­

Vic­tor Shih al­ways had a knack for what makes China tick.

Shih, an as­so­ciate pro­fes­sor of In­ter­na­tional Re­la­tions and Pa­cific Stud­ies at the Univer­sity of Cal­i­for­nia San Diego and the au­thor of many books, sees China as nat­u­rally di­vided into fac­tions. Ac­cord­ing to him, such fac­tions play a vi­tal role in China’s econ­omy.

Shih moved with his fam­ily to the US from Hong Kong in 1986. His par­ents, be­ing teach­ers, and his grand­par­ents in­flu­enced him to read and think since he was a boy.

“I have read all Chi­nese books about his­to­ries in Hong Kong be­fore I en­tered mid­dle school in the US,” Shih said. “I did see my ad­van­tages in know­ing the Chi­nese lan­guage com­pared to my class­mates in the US. But what re­ally mat­ters is that I pre­pared my­self with a solid foun­da­tion in Chi­nese his­tory.”

Shih got high marks in eco­nomics and pol­i­tics dur­ing his un­der­grad­u­ate days at George Wash­ing­ton Univer­sity in Wash­ing­ton. Shortly be­fore his grad­u­a­tion, his pro­fes­sor told him he should con­sider a PhD pro­gram. Shih fol­lowed his ad­vice and even­tu­ally got ac­cepted to Har­vard Univer­sity.

Guided by Roderick Mac Far­quhar, then chair­man of the Depart­ment of Gov­ern­ment at Har­vard and for­merly di­rec­tor of the John King Fair­bank Cen­ter for East Asian Re­search, Shih was in­spired to pur­sue his main in­ter­est in Chi­nese pol­i­tics — fac­tions in Chi­nese po­lit­i­cal his­tory and “cul­tural revo­lu­tion” (1966-76). Shih also fo­cused on the link be­tween elite politi­cians and bank­ing poli­cies in China.

His doc­toral dis­ser­ta­tion, also his first book — Fac­tions andFi­nan­ceinChina:Elite Con­flic­tandIn­fla­tion— was pub­lished in 2008. The book ex­am­ined the Chi­nese bank­ing sec­tor.

“There was no ex­ist­ing frame­work with which to an­a­lyze the links be­tween bank­ing and pol­i­tics,” he said. “I did lots of in­ter­views, sta­tis­ti­cal anal­y­sis and archival re­search.”

The book is con­sid­ered by some the first in academia to de­velop a frame­work with which to an­a­lyze how elite pol­i­tics af­fect mon­e­tary and bank­ing poli­cies.

Schol­ars re­view this book as a clear, well-re­searched ex­pla­na­tion of the dy­namic driv­ing China’s re­forms.

“It is both a fas­ci­nat­ing por­trait of elite pol­i­tics in China and a rig­or­ous test of an an­a­lyt­i­cal model,” said Bruce Dick­son, po­lit­i­cal sci­ence pro­fes­sor and di­rec­tor of Asian stud­ies at George Wash­ing­ton Univer­sity. “Most schol­ars are good at one ap­proach or the other. Shih shows he is equally gifted at both.”

Shih be­gan

his study

of China’s cap­i­tal mar­kets in 2009. His find­ings on China’s lo­cal gov­ern­ment debt were pub­lished in China Eco­nomic Re­view in 2010, cre­at­ing a stir in the US and China. He noted in the the­sis that com­bin­ing the find­ings of the Na­tional Au­dit Of­fice (NAO), the China Bank­ing Reg­u­la­tory Com­mis­sion (CBRC) and the Peo­ple’s Bank of China, the to­tal of­fi­cial es­ti­mates of lo­cal gov­ern­men­tal debt is much higher than the Na­tional Au­dit Of­fice (NAO) said in its re­port.

“My es­ti­mate was en­tirely based on of­fi­cial num­bers that the gov­ern­ment an­nounced to the pub­lic on­line,” Shih said.

His study sug­gested that Chi­nese gov­ern­ment must have the re­solve to stop lo­cal­level lever­ag­ing be­fore risks in the fi­nan­cial sys­tem steam out of con­trol.

“I no­ticed that in re­cent years the Chi­nese gov­ern­ment has taken many ef­forts to con­trol the to­tal amount of lo­cal debts,” said Shih. “I also no­ticed that the Chi­nese gov­ern­ment tends to be more trans­par­ent about the fi­nan­cial fig­ures.”

Shih said now Peo­ple’s Bank of China pub­lished the to­tal debts of the en­tire coun­try and he’s able to ob­serve the whole sit­u­a­tion in China. “My in­ten­tion is to an­swer such a ques­tion — how China’s to­tal debts af­fect China’s rapidly grow­ing eco­nomics?”

China has sig­nif­i­cant abil­ity to con­trol the eco­nomic fluc­tu­a­tions. Shih ar­gued that “China needs to bring some fi­nan­cial risk to some de­gree.

“In fi­nan­cial mar­kets, there have to be some fail­ures,” Shih said. “If your bonds are bad ones, your company shuts down. So peo­ple won’t count on the gov­ern­ment all the time as the fi­nal straw for bad business. Any mar­ket has risks.

“The only thing I see purely pos­si­bly run by a mar­ket econ­omy is the so­called un­der­ground bank­ing sys­tem, which is il­le­gal in China.”

Shih be­lieves that the Chi­nese gov­ern­ment will make more of an ef­fort to bal­ance the econ­omy.

“Slow­ing down a bit is not bad, and some­times needed,” Shih said.

Shih turned to the business world in 2012 and 2013, run­ning a company with some of his for­mer col­leagues and friends.

“It is a good ex­pe­ri­ence that I got to stand in the real cap­i­tal mar­ket; how­ever, I ended up re­al­iz­ing that the academia world gives me the sense of real hap­pi­ness and ac­com­plish­ment,” said Shih, who re­turned to teach­ing as an as­so­ciate pro­fes­sor at the Univer­sity of Cal­i­for­nia-San Diego, his cur­rent pro­fes­sion. VIC­TOR SHIH As­so­ciate Pro­fes­sor, School of In­ter­na­tional Re­la­tions and Pa­cific Stud­ies, Univer­sity of Cal­i­for­nia at San Diego

• • BA summa cum laude in East Asian Stud­ies with a mi­nor in eco­nomics Diploma, The George Wash­ing­ton Univer­sity (1997)

• Ph.D. in Gov­ern­ment with a fo­cus on com­par­a­tive po­lit­i­cal econ­omy, Chi­nese pol­i­tics, and in­ter­na­tional re­la­tions, Har­vard Univer­sity (2003) As­so­ciate pro­fes­sor, School of In­ter­na­tional Re­la­tions and Pa­cific Stud­ies, Univer­sity of Cal­i­for­nia at San Diego (2012-present ) As­so­ciate pro­fes­sor of po­lit­i­cal sci­ence, North­west­ern Univer­sity (2010-2012) As­sis­tant pro­fes­sor of po­lit­i­cal sci­ence, North­west­ern Univer­sity (20032010) Teach­ing and head teach­ing fel­low, Har­vard Univer­sity (1999-2003)


Vic­tor Shih is as­so­ciate pro­fes­sor of In­ter­na­tional Re­la­tions and Pa­cific Stud­ies at the Univer­sity of Cal­i­for­nia San Diego and au­thor of many books.

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