Success in the financial sector does not guarantee success elsewhere. The reform task in the financial sector is nothing less than Herculean. This means that the state itself is assuming responsibility for all or part of the NPL portfolio of the state banks. This will almost certainly lead to an acceleration of the privatization process because the state's fiscal position is still very weak. Nobody knows precisely how much more needs to be transferred, or otherwise dealt with to clean up the balance sheets of the state commercial banks.
Most international experts believe the problem is larger than that.
Preparing the financial sector for the WTO is no easy task for China, and there should be no surprise if slippages occur. Cleaning up the state bank balance sheets seems to make sense only if the balance sheets can be kept clear thereafter. But that is easier said than done. Indications are that not all poorly performing state enterprises are barred from new state bank credit. Furthermore, pressures to keep certain poorly performing state enterprises alive for employment reasons, have, of course, not suddenly disappeared.