This conflict led to a bloody purge of local Communists. Moreover, the “suppression of counterrevolutionaries” did not stop but continued and deepened when the Communist leadership moved from Shanghai to Jiangxi.

Along with macro-prudential regulatory and supervisory policy, the BoK performs a vital role as the lender of last resort (LOLR), providing liquidity support to individual institutions and financial markets, in order to ensure financial stability. In the wake of the global financial crisis, the LOLR has become an essential crisis management instrument of the BoK. However, the Korean government has also been active as a LOLR, because the resolution of financial crises required assisting not just illiquid banks but also insolvent ones. This chapter looks at the evolution of the BoK’s role as the LOLR, focusing on the division of labour between the government and the central bank.

>Monetary policy is no longer the decisions to determine money, but just to decide on the short-term interest rates. Notwithstanding this, old principles consider these decisions as being equivalent, based upon the negative correlation between the bank reserve and the interest rate in the money market. Moreover, the BoK staff had a firm belief that the open market operation in the money market was the most desirable policy tool. In practice, however, the interest rate is neither determined by the interplay of demand and supply in the money market, nor is the open market operation an indispensable instrument, given the increasing role of the standby facility. This chapter examines the determination of the short-term interest rate under the 'corridor' system

There are three key questions with regard to the exchange rate policy in Korea: (1) the determination of the appropriate level of the exchange rate; (2) the reduction of exchange-rate volatility; and (3) the connection between the interest rate and the exchange rate. Until very recently, the Korean exchange authorities put a primary emphasis on keeping the exchange rate of the Korean won at an appropriate level. Along with the liberalisation of capital flows, the priority shifted over time towards reducing excessive fluctuations of the exchange rates. Furthermore, as interest rate changes increasingly have a stronger impact on capital movement, monetary policy has also become inseparable from exchange rate policy. This chapter examines the direct and indirect foreign exchange rate policies of the Korean government and the Bank of Korea.

The Introduction lays out the basic theses of the book: that it was local revolutionaries, not Mao, who introduced Marxism and, more importantly, political organization, to the countryside, but Mao suppressed these local movements. Moreover, the party was remade by Mao as a far more hierarchical, disciplined, violent, and militarized party than anything imagined in 1927.

Chapter Three lays out Mao Zedong’s determination to build a revolutionary army. Party policy at the time argued for mobilizing the masses and the party leadership thought that Mao’s approach was too militaristic. Mao and Zhu De came into conflict over the scope of party control, and Mao was voted out. Zhou Enlai backed Mao, and he was restored to his position. The chapter ends with the Gutian Conference, at which Mao asserted his dominance over the military.