China has a long, long way to go

The Chinese government is considering creating a $15 billion fund to help bail out the nation's ailing stock market, according to a senior government official and people told of the proposal.

The creation of a huge fund to invest in mainland stocks would be the government's most striking effort yet to prop up share prices and try to restore confidence in a market that has fallen to its lowest level in about eight years...

Government bailouts have a weak track record, however, and the proposed support is unlikely to nurse the growth of the capital markets here. When authorities in Hong Kong and Tokyo stepped in to aid their local stock markets, the moves only provided a short psychological lift and failed to produce a sustained turnaround...

At the heart of the problem is that private companies, which have a much better track record, are not allowed to list on the Chinese stock exchanges.

Here is the NYT story.