"Fly, Could you give me a broad comparison of the state of trading in securities and gold in China compared to say NYC or London? You obviously have a big interest, but are you quite the exception, or do you know many people like you?"

Bill, I suppose there are market fanatics in every market, but I think most of them were diced in the 2001-2005 bear market. I don't know many "Little People" like me here, although I'm sure they exist.

"Well, I have this sense that the trading in markets in rapidly improving but still far behind the other major markets in terms of sophistication. I'm trying to assess how much interest there is for professional trading in China. Obviously, the majority of people in Canada, US and UK still use mutual funds mostly, but the Web has really helped many people here become fairly sophisticated, and there are now a lot of people who trade full-time from home in these markets. Would you say that has already happened, or is happening or may soon happen etc, in China?"

I think the interest will grow as the Chinese market indices climb up higher. Interest is highest during the late stages of a bull market ;). And we're not halfway there yet, I think. I don't think many people own mutual funds here. Nor are mutual funds heard of very often.

The number of mutual funds existing is far less than the thousands in the US. There are about 237 funds that people can invest into directly through a local brokerage account. Even if we do have like 75 million brokerage accounts open, that's still a tiny percentage of our 1.3 billion population. And a few months ago I sent you an article saying less than half of those brokerage accounts are still active.

Due to the bullish movement in the Shanghai and Shenzhen stock markets in the last few months, the bearish sentiment is somewhat changed, and there is news of more people opening accounts and trading.

"Who teaches trading in China? Are there courses, day trading shops, broker-dealers, etc that teach, or is this still a very immature market?"

It's still a very immature market. People buy and sell stocks on news (some call the Chinese stock market a "policy market" or one heavily influenced by policies), or based on what the so-called experts on TV say.

I doubt the average trader/investor here has an ounce of fundamental/technical analysis in them. Western technical analysis is largely shunned; you don't hear so much about breakouts of consolidation areas here.

"Do the full-time or regular part-time traders there trade just Shanghai/Shenzhen, or Hong Kong too? What about NYSE and Nasdaq?"

Well, it's not very easy to open an account to trade Hong Kong securities or US securities. It can be done, many foreign brokers offer such a service, but I don't think that many Chinese trade foreign equities. They might, but since it's not publicized and there aren't any records, I can't be sure.

However, I believe that Chinese have a very good impression of the US SEC (they think it's like some kind of god that can catch insider trading etc and does a better job than our domestic one). This can partly be seen by the fact that institutions (like banks/insurance companies) here were pushing eagerly for the QDII (Qualified Domestic Institutional Investor) which allows them to enter foreign markets.

"How involved are foreign brokers there, or is the retail level trading only done by Chinese brokers? Who are the big Chinese brokers? What products and services do they offer?"

Retail level trading done by Chinese brokers domestically? There are lots of them, and lots of them went broke in the bear market!

Here are the ones that are still alive and their sites: ZhongXin http://www.ecitic.com/ (中信�券, It's also a publicly traded company), Guoxin www.guosen.com (国信�券), Zhaoshang(招商�券) Subsidiary of China Merchant's Bank, www.newone.com.cn etc.

I could find more, but most that show up in the searches are bankrupt. I use Guoxin personally, not that I have done any deep research on its fundamentals though. They offer trading, and professional asset management. Some offer real money forex trading (with huge bid/ask spreads and no leverage). There are other brokerages that offer domestic futures trading.

"Is a big Hong Kong company like Hutchison Whampoa a big name in China or only in HK?"

I haven't heard of its operations in China, in conversation or media, but everyone knows its a company that Li Jia Cheng (or Li Ka-shing if you prefer) of HK owns a huge portion of.

So there you have it. Most people, I think, have a solid perspective of China's growing economy, particularly its physical aspects, but how many of us know about its domestic capital markets and financial services industry?

I'd be delighted if others in China would share their views here or directly with me on a no-name basis.

I mean, how many photos and videos of Shanghai can we watch without having a clue to a typical trader's life in the city?

I'm going to make a statement here that may surprise readers. I'm going to say that Chinese traders are soon going to dominate the capital markets in the way that the Japanese are presently dominating the world's auto manufacturing industry.

You see; I've been to China (on two occasions) " China, Hong Kong, Macau, Taiwan " and I have a sense of the culture, and how it differs from North America and Europe. There is a better understanding of the balance of nature, and cycles, there, and the people are incredibly entrepreneurial and competitive.

We will all see examples of that culture in the Beijing Olympic Games of 2008.

I think in time we will all see that the Chinese way of life is quite adaptable to capital market trading, and because money is involved the Chinese will be major players. Shanghai in time will become bigger in importance to global traders than New York, London or Tokyo.