Last month, I visited China for the first time, at the invitation of Huawei Technologies, a company, which has recently been in the news for its contract with BSNL. I visited Beijing, Shanghai and Shenzen.

I have been an old admirer of the Chinese economic miracle, which, to my mind, is greater than the much-publicised wirtsschaftswunder of post-war Germany and Japan.

Two major reasons: first, the Chinese economic miracle has affected a far larger number of people. Second, Germany and Japan started as war-devastated economies, but, unlike China, had a huge wealth of knowledge and technology.

One striking difference between India and China is the attitude towards learning from others. Our political or bureaucratic masters or, indeed, businessmen, rarely acknowledge in so many words that they do not understand many things, and that they need to learn from the rest of the world - generally, they are too suspicious of it.

The Chinese, on the other hand, seem to acknowledge this much more explicitly. At the end of one meeting with the Huawei management, in response to some suggestion from me, the company's director, while expressing thanks, also frankly admitted in a largish meeting, that, as a young company (it started in 1988), Huawei needs to learn many things.

On a different level, as Nanjing Automobile prepares to take over the assets of MG Rover, the British car company, the senior Chinese official of the company in the UK said, "We lack international experience. We are the newcomers in the global market and in order to guarantee that this project will be successful we really need a partner."

In a recent article, I had referred to the need of Chinese banks for technology and trained personnel to successfully cope with a new forex market scenario. Attracting of foreign strategic investors in Chinese banks (up to 20 per cent) before listing, is part of the strategy to plug this gap.

But there has been a huge amount of effort and investment over the past three years, to come to the present stage. Asset reconstruction companies were formed in 2002, and have disposed off a significant proportion of the bad loans transferred to them.

Foreign funds, too, are enthusiastic buyers, despite question marks about legal titles to the assets. The government has poured in an estimated $250 billion, to recapitalise the four major state-owned banks and for backing the ARCs.

Even the state banks have invited foreigners on their board. Every international commercial or investment bank worth its name is queuing to invest in Chinese banks and other financial services companies, even bankrupt brokers.

Evidently, the risks of being left out are more those of paying a high price. Take the case of the China Construction Bank, which recently listed on the Hong Kong Stock Exchange, with an IPO of $8 billion, the largest global issue for four years until then.

Before the public issue, Bank of America and Temasec, the Singapore government investment arm, had picked up 15 per cent of CCB at a price, which then looked fancy. After the IPO, market capitalisation of CCB is in excess of $60 billion, more than that of Deustche Bank or Barclays, and six times that of our SBI [Get Quote] - and this in respect of a bank that was technically insolvent a couple of years ago, and whose then chairman was sacked and arrested for bribery just six months earlier.

Incidentally, both BankAm and Temasec are sitting on huge paper profits after the IPO. The Bank of China and the Industrial and Commercial Bank of China, two other state-owned banks, are expected to follow CCB's listing next year. Meanwhile, the shareholders of the Royal Bank of Scotland are critical of the price paid to acquire the stake in BoC.

Ironically, so was the management of BoC, which, defending its decisions, has argued that such foreign investors were needed to "help with a radical overhaul of the ... banks systems and operation ... in areas such as product control and risk management".

Cleaning up of the books and attracting strategic investors has been only a part of the strategy. The big state-owned banks have radically reorganised and rationalised their manpower and the number of branches.

Foreign banks are attracted not only by the potential of the Chinese economy and banking, but have also entered into agreements about allied services like credit cards, consumer loans, investment banking and so on to make the investments attractive.