The central planning apparatus remains strong. Accounting standards still need much work. Frequent government policy changes, as well as scandals, trigger volatility in the markets. If these were written down, there would be negative equity left in the banking system. Interest rates for many loans are set by government policy, rather than being weighted for risk.
Banks often have no capital left to lend to credit-worthy firms like joint ventures.
At the end of 1993 the government announced that twenty-one state companies were eligible to list offshore. The underwriters who won the right to do the underwriting for some of these companies, upon examining their books, found them unfit. Rather than privatize, state-owned enterprises are selling minority shares to investors. The Chinese government is still unable to countenance private control of a major sector of the economy. Still, the government is beginning to allow state-owned enterprises to go bankrupt.