"Examples abound of fraudulent accounting and stock manipulation in China. In a truly daring move, branch officials of the Agricultural Bank of China issued a $10 billion in phony letters of credit in 1993."
"Shen Taifu had a better idea. As a senior officer of the Great Wall Machinery and Electronics Scientific and Technological Industry Company, he duped 100,000 hardworking Chinese into investing over $170 million in securities touting a 24 per cent annual interest rate."
"After collecting the money, Shen tried to leave China on a phony passport. He was caught and eventually shot, once again proving the old adage 'you can't take it with you.' These two cases, plus numerous other examples, spurred the Ministry of Finance to conduct a study."
"In 1999, the ministry released data showing that a whopping 89 per cent of the companies listed on the Chinese exchanges had cooked their books."
Burton G. Malkiel in 'From Wall Street to the Great Wall: How investors can profit from China's booming economy' (www.wwnorton.co.uk)