HONG KONG -- He has advised rebels in the Burmese jungle and been a regular at cabinet meetings in teh Philippines. He counseled Presidents Nixon and Carter on Asia and has collaborated with Zbigneiw Brzezinski.
Often controversial, never at a loss for words, William Overholt is certainly one of American banking's most colorful and influential figures. But, perhaps because he has his fingersin so many pies, bankers in the United States know little about him.
In this British colony, however, the 49-year-old Mr. Overholt's word is considered gospel. His counterparts and competitors use words like "brilliant" and "genius" to describe him. The managing director of Bankers Trust Co. here is known as a man-about-town; his name and picture appear frequently in the society pages.
"Most of us here are commercial bankers. Bill is an economist," says Harry Garschagen, area general manager for Bank of America. "He's one of the most intelligent and interesting people in this business.
His latest effort, a book called "The Rise of China: How Economic Reform Is Creating a New Superpower" (Norton, 1993), draws on his 30 years of experience in Asia.
Mr. Overholt's theme is simple: China's strategy today is similar to those of Asian neighbors South Korea and Taiwan in the 1970s. Like China, those countries experienced their own Tiananmen Squares, but emerged as strong democracies.
Criticizes Sanctions
Patience and encouragement - not hectoring and trade sanctions - are what the WEst can best offer China today, Mr. Overholt argues.
"If you're going to have a stable deocracy, it has to be built on a stable middle class," he says in an interview. "In order to get to that stage, you need economic reform for a generation."
The book, which he compiled in his spare time over six months, has been criticized by some as simplistic, too optimistic, or too soft on the Chinese. But bankers in HOng Kong call it a must read for anyone planning or doing business in China.
So how does a banker come to be the author of a major socio-economic survey of China?
"I didn't choose banking," Mr. Overhold resopnds. "It chose me."
Mr. Overholt spent his formative years in Newton, Mass. His abilities in physics and mathematics led him to graduate-level classes at Harvard and Brandeis when was only 17.
Civil Rights Movement
Physics was his calling, he thought, until he attended a civil rights march while on a school vacation. Mr. Overholt, who confesses to a strong rebel streak, was attracted to the civil rights movement.
Uncertain about the future, he tagged along as his father went to the Philippines in 1963 to reorganize a small university. He enrolled in a math class there, but switched instead to Filipino dancing. "It was a lot better introduction to Asian culture than mathematics," he recalls.
His interest piqued by his Eastern experiences, Mr. Overholt returned to the United States to pursue sian studies at Harvard. The timing, just before Mao Zedon's Cultural Revolution, was perfect. "China was doing all the dumbestthingsin its modern histry then, and a lot of people were really fascinated."
At the same time, the Vietnam War was picking up, and Mr. Overholt was shocked by what he thought was a lot of reactionary garbage on the Left. Americans, he believed, didn't know the first thing about Southeast Asia, so he started a study group "to counteract all the nonsense."
The group eventually flopped, but Mr. Overholt excelled in Asian studies, and eventually won a grant to do his senior thesis on organizing peasants into a political force. Marx, Aristotle, and other philosophers had said it wasn't possible, but Mao had done it in China.
Doctorate at Yale
Returning to the Philippines, where a communist insurgency was in the works, Mr. Overholt befriended military commanders on both sides. In China, he had found that Mao had capitalized on the country's bureaucratic tradition and long-tanding oppression of women. The Philippines, in contrast, lacked both.
He returned home and spent a summer documenting atrocities of Chinahs Cultural Revolution for the Pentagon before going to Yale for his doctorate.
Afterward, he went to work for Herman Kahn at the rightwing Hudson Institute, firmly convinced that South Korea and Taiwan were run by "pitiless and authoritarian regimens."
Mr. Kahn changed Mr. Overholt's mind on that, and eventually Mr. Overholt found himself writing position papers that argued that the rapid economic growth of small Asian countries would save the region from communism. He also assessed the trustworthiness of Mao Zedong's government for the Nixon administration.
In 1976, with Mr. Brzezinski, Mr. Overholt launched the journal Global Assessment - his first piece predicted the coillapse of the Soviet Union - and joined President Carter's foreign policy team.
His work with Mr. Kahn, he says, was "intellectually titillating." But by 1980, with a big mortgage and two kids, Bankers Trust made him an offer he couldn't refuse. The bank was establishing a political risk unit, and they wanted him to head it.
"Things like Iran and Nicaragua were exploding in their facees, and they couldn't get a handle on it," he recalls.
Fear of Pinstripes
But the idea of working for a bank made Mr. Overholt hesitate. "I was terrified that I was going to be captured by a bunch of gray pnstriped personalities and not be able to escape."
He overcame those fears, and within six months had more than proved his worth, persuading the bank to pull out of Poland beforeits collapse - a decision that saved the bank about $150 million.
Today, 14 years later, Mr. Overholt is sitting in a glasswalled conference room in Bankers Trust's 36th-floor office in Hong Kong. He is articulate and impressive as he discusses his views and his past.
Working with the bank, Mr. Overholt says, offers the best of both worlds: He gets a support system and the chance to apply ideas to the real world, yet his connections and standing outside the industry get him access to political leaders that a business card would not.
"I have three lives," he explains when asked to define himself. "One is banking. The second is intellectual - I'm excited by ideas, and get a kick out of seeing them in print. The third is political. I care about people. It excites me when half-starving peasants are suddenly eating well and speaking freely."
U.S. Banks 'Overcautious'
The banker in him is critical of U.S. banks, which he says have largely missed the boat on Asia. "American bankers have had trouble believing that this economic miracle is goingto continue," he says. "So they are overcautious and behind the curve."
Mr. Overholt is neither. No sooner had he arrived in Hong Kong than trouble began brewing in the Philippines.
Mr. Overholt had maintained his connections in the country, playing an active role in the early 1980s as a back-channel link between the government of Ferdinand Marcos and the Pentagon.
In the 1986 presidential election, both Mr. Marcos and Corazon Aquino soughth is advice. He went with Ms. Aquino, and became her "key political adviser and key fund-raiser," he says.
When Ms. Aquino took office, he helped install the ministers of both finance and defense. Mr. Overholt also lobbied her to implement the types of expoert-oriented reforms that had made other Asian countries successful. But the then-president balked.
Word of this role in the Phillipiones spread to Burma, where a rebel group was fighting a repressive authoritarian regime. Mr. Overholt was invited to visit the rebels, but was leery - Burma is widely known as a drug hotbed.
Finally, he decided to trek to their jungle compound, because "I thought it could be an interesting cultural experience." What he found shocked him: a group of drug-free Baptists, who awoke at 5 a.m. and sang Handel's Hallelujah Chorus in their native tongue.
"It was a surreal experience," he says.
Mr. Overholt helped the group, spending several years documenting the "sense of injustice" he felt because U.S. government money was supporting the oppressors. He wrote an article for Foreign Policy, which led to a U.S. government policy change.
Agreement with Bank
How does Bankers Trust feel about such exploits? Mr. Overholt says he and the bank have struck a balance: He can say and write what he thinks, but must specify that it is his view, not Bankers Trust's. "The minute I did damage to the bank, I was gone," he says.
Conflicts have arisen, like the time in the early 1980s when he correctly predicted a collapse in world oil prices. "Our energy group was betting pretty heavily that oil prices would keep rising," Mr. Overholt recalls. "They got pretty upset with me for publishing [an opposing view]."
Perhaps his most controversial stand came five years ago, when he wrote an article that was supportive of China in the aftermath of the Tiananmen Square massacre. Titled Grobachev Is a Failure, What's Next? it predicted the collapse of the Soviet Union and said that Chinese leader Deng Xiao Ping had "created an overwhelming coalition on the side of reform."
Newspapers and magazines rejected the piece, reflecting the anti-China, pro-Gorbachev mood ofthe time. Nearly a year later, the International Herald Tribune agreed to run it, creating an overwhelming response on both sides.
Later, his insights proved to true.
Rejects Use of Trading Status
On China today, Mr. Overholt is a firm critic of using most-favored-nation trading status as a weapon in the war on human rights.
"It would devastate free areas like Hong Kong and Taiwan, and it actually helps the very conservative leaders in Beijing, who have said that if you open the country too much to Westerners...they will try to manipulate us."
"For the first time in centuries, the Chinese people have enough food and enough clothing and enough housing," Mr. Overholt says. "And while it's still a very repressive dictatorship, they do have a degree of freedom. Citizens can sue the state, and for the first time, Communist Party candidates are being defeated in elections.
"This is what economic reform does," he adds.
Mr. Engen, a 1993 Freedom Forum Fellow in Asian Studies, is a freelance writer living in Minneapolis.
