A totalitarian party that switches from an ideological goal of remaking society to a pragmatic goal of economic development does not necessarily move toward political liberalization. The path to political modernization in China is not clear but it is unavoidable. Prosperity, the growth of the private sector and greater integration into world markets has already increased the level of pluralism within China. The growing number of people working in the non-state sector will gradually challenge the rules of the country's political game, as they are already doing at the local level in some provinces. Increasing political strain could raise the level of factionalism within the party but the likelihood of a formal split in the institution is low.
Political reform is likely to happen in spurts, especially after a change of leadership.
It may be based more on personalities and circumstances rather than on an ideological vision of liberalism. The role of government intervention Failure to modernize and strengthen the country's institutions could push the government to rely more on policy levers under its direct control in order to stimulate economic growth. This may result in more government-directed lending by the banks. The growing cost of bailing out China's insolvent commercial banking system lends further urgency to the task of strengthening fiscal institutions. Economic growth in recent years has been sustained by public investment, some of it through the national government's budget but most of it through lending by government-owned banks.