Data from Galaxy Securities Co. Ltd. show that equity funds had the biggest losses. The share prices of more than 76 percent of the country's 132 equity funds dropped below 1 yuan ($0.15)-their paper value. One of them even fell below 0.4 yuan ($0.06) on October 10.

The benchmark Shanghai Composite Index on the mainland stock market has fallen more than 60 percent so far this year, directly causing funds to perform dismally.

Qualified foreign institutional investors (QFIIs), which are allowed to invest in mainland financial markets, also had a tough time. Lipper Inc., an American company that provides research and data on mutual funds, said in its latest report that the QFIIs lost nearly 50 percent of their value this year because of falling stock prices and huge waves of share redemptions.

Market analysts said investors are increasingly favoring bond funds, which have fixed yields and are not as risky in a bear market. Since the beginning of this year, the values of 63 bond funds have risen 2.69 percent on average, defying the performances of other funds.

SOEs Need Prudence

State-owned enterprises (SOEs) were urged to exercise prudence when investing in the next year to prevent the global financial crisis from hurting their profits.

The State-owned Assets Supervision and Administration Commission (SASAC) made such request in a circular issued on October 13. It was the first time that SOEs had been asked to be cautious about investing in the financial markets. Analysts said it was a signal that SOEs would cut back on their equity investments.

In the circular, SASAC ordered 147 SOEs under its supervision to outline fiscal budget reports for 2009. Those companies with shrinking profits were prohibited from a budget increases.

The Shanghai Securities Journal reported that central SOEs currently invest hundreds of billions of yuan in domestic stock markets, accounting for around 10 percent of the value of the mainland stock market. But the stock market plunge has hurt many SOEs, which were punched both by their own share price drops as well as the declining prices of other companies' shares that they had purchased.

Trade Surplus Rebounds

China's trade data for September came as a surprise for many. Contrary to market expectations, the nation's trade surplus surged to a new monthly record high amid the global economic recession.

Figures from the General Administration of Customs showed that Chinese companies exported $136.4 billion and imported $107.1 billion last month, an increase of 21.5 percent and 21.3 percent, respectively, year on year. The trade surplus in September amounted to $29.3 billion, the highest single monthly figure in history.

"Exports remained stable compared with that of August. It is certain that the shrinking imports gave rise to the surplus boom," Feng Yuming, an analyst at Orient Securities Co. Ltd., told the Dongfang Daily.

Li Huiyong, a macro-economy analyst at Shenyin & Wanguo Securities Co. Ltd., added that China's trade data indicated that the world economy was better than people had anticipated.

"China has effectively weathered the world economic slowdown by way of expanding sales in emerging markets like the Middle East," he was quoted as saying.

Feng said he believes China's exports will slow down next year, and added that "imports would slow down even more." He expects China's trade surplus to reach new record highs next year.

The country's trade surplus and high foreign direct investment propped up its foreign exchange reserve that totaled about $1.906 trillion as of September 30, the largest amount in the world. The reserve has helped China fend off the global financial crisis.

Some analysts said they suspected that the continued inflow of hot money boosted reserves. But Merrill Lynch Inc. said the reserves in the third quarter were just a bit below the sum of trade surplus ($82.9 billion) and foreign direct investment ($22 billion), implying that hot money inflows were not a problem.