The reform of the mainland's banking system proceeds at a cracking pace. The China Securities Regulatory Commission is instructing state-run banks - as if there really were another kind - to lend to small- and medium-sized enterprises (SMEs).
Yes, it is easy to see now why the Royal Bank of Scotland, Lee Ka-shing and the Singaporean government are buying into the Bank of China. Just imagine the gold mine that will be opened by this latest directive from the top: China's massive, lumbering old banks, long accustomed to having to lend to government bodies, state-run enterprises and all their relatives, will now be able to lend to nimble, reliable 'mom 'n' pop' corner stores. The world over, SMEs make better use of capital, so returns at the tottering giants should start to improve dramatically.
At least, it ought to work well. Taiwan, an obvious role model for its arch-enemy's economic development, has its legendary SMEs to thank for its reputation. Paragons of efficiency, they are commonly referred to as the 'backbone of the Taiwanese economy' by officials, even though none is a household name. They make widgets. Or shoes with someone else's swoosh on them. All very unsexy. But they are renowned as the most amazing cost-cutters and, hence, destroyers of their competitors' profit margins, the world has ever seen.
What worked in Taiwan should work on the mainland, the thinking goes. Only, perhaps, it might work too well. What is often overlooked in the Taiwanese SMEs' remarkable success story is that they did it mostly without help from the banks. Taiwan in the 1960s was a fascist military regime not too dissimilar from the mainland today. The banks were run by a small elite of mainlanders who crossed over with Chiang Kai-shek at the end of the civil war in 1949. They lent only to each other. But they left the export market open to anyone who wanted to have a crack at selling, say, widgets or shoes.
So native Taiwanese did the only thing they could: pooled their extended family's savings and kept it under the mattress, where tax collectors would never think to look. Their financial efficiency was born of the reality that they could not afford to make mistakes.
This began to change with the liberalisation of the banking sector in the late 1980s. New banks sprang up that were happy to lend to these newly rich people.