China Fund Realities Shatter Foreign Firms' Dreams

China has all the makings of a profitable market, with potentially hundreds of millions of customers who have about $1.7 trillion squirreled away in savings just waiting to be tapped. So far, however, the tap is not gushing forth, and a number of once-hopeful firms are nursing ever-distant dreams.

"Anyone who is going into this market with an expectation of short-term profits is totally unrealistic," Bonn Lu, a partner at KPMG in Hong Kong told Reuters.
While funds under management have blossomed to $60 billion from virtually nothing in 1999, tough competition, limited investor education and few profitable opportunities, among other things, have conspired against even the most successful of companies elsewhere.

"There's just not enough to invest in, quite frankly," Robert Grome of PricewaterhouseCoopers said in a Reuters interview, as he points to perhaps sunnier days when "we get a lot more IPOs, a lot more quality companies coming to the Shanghai market."