"China's financial sector has sustained no great losses as a result of the US crisis, and the country's financial system remains stable. It merits our confidence," said Ding Zhijie, vice-president of the School of Finance and Banking in the University of International Business and Economics.

Reforms in China's financial sector, such as share-holdings in state-owned commercial banks and improved management of medium-sized and small financial institutions, have advanced in recent years. They act as the sector's risk buffer.

The Banking Supervisory Authority has been on the alert for market risks over the past two years, which is why it raised the down payment percentage on home mortgage loans in good time. And as China's commercial banks are traditionally punctilious about lending, they avoid the perils of US sub-prime credit. The Industrial and Commercial Bank of China, the country's largest commercial bank, experienced a paltry 1.84 percent in loan defaults by developers and 0.74 percent by home buyers, according to statistics.

The financial sector in Shanghai, seat of 850 financial institutions, including 375 foreign-funded and joint ventures with total assets exceeding RMB 5 trillion, maintains an optimistic outlook. The business volume on the domestic financial market from January to November 2008 hit RMB 144.2 trillion, a 26.5 percent rise, according to the municipal government's financial service office. And during the first three quarters of 2008 the city's banking industry made profits of RMB 62.05 billion – 1.1 times that of the whole year of 2007.

Still No Safe Haven

These cheering analyses, however, do not imply that China is immune to the crisis presently ravaging the global economy. It is indirectly afflicted. The plunging global stock market and fluctuations in the RMB-USD exchange rate represent serious threats, particularly to China's entity economy.

"A slowing world economy is taking its toll on China's exports, and consequently impairs the whole national economy, including the financial sector," Li Sha said. Given China's heavy dependence on exports for its rapid economic growth over the past 30 years, the nation must now brace itself as major importers Europe and the US head towards full recession.

The 70 percent deflation that China's stock market suffered in 2008 was among the worst worldwide. Li Sha and her colleagues have low expectations for their company year-end bonus.

But this is a prudent attitude at a time when the securities industry is widely predicted to lose 13 percent in revenue and 16 percent in net profits in 2009. These figures already dropped a respective 55 percent and 63 percent in 2008. The rate of return on common stockholders' equity (ROE) is also expected to dive deeper from 13 percent in 2008 to 10 percent. The securities sector has finally met its winter of discontent after a balmy spring in 2006 and a burgeoning summer in 2007, when revenues and profits hit record highs.

But every cloud has a silver lining. Fang Xinghai of the Shanghai Government Financial Service Office has pinpointed the world financial center shift of focus towards Asia since the US sub-prime crisis. The concerted failure of international investment banks thus clears the way for domestic securities companies to advance on the world market, where Chinese players can compensate for their lack of managerial expertise and experience by purchasing shares in their international counterparts.

The regiment of professionals dismissed from Wall Street is also a windfall for China. In December of 2008, the Shanghai municipal government sent a delegation of representatives of two dozen banks, insurance and securities companies to the UK and the US to headhunt senior managers in various financial fields. There were reports of an overwhelming volume of applicants at each stop. The delegation returned bearing a 150-kg load of resumes.