China has recently done much to repair its tattered commercial banks. By contrast, another important group of financial firms-its stockbrokers and investment banks-remains a sorry mess. Hit by a falling stockmarket, a dearth of flotations and bad management, the mainland's 130-odd securities companies lost 15 billion yuan (almost $2 billion) in 2004 and probably more in 2005. For years they have failed to make enough money to match the returns they guarantee their customers. Some have not paid up; some have eaten into their capital. All but ten or so are technically insolvent.
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