There may be no one better equipped and better placed than Ding to judge what is going on with the Chinese economy, financial sector and Chinese corporations. He thinks there are big challenges ahead and everything will depend on how adroitly the Chinese leadership can move from doling out fiscal stimulus to making hard reform choices. CICC evaded the direct sting of the financial crisis partly by accident. The firm has consistently failed to obtain a proprietary trading licence that would have enabled it to leverage its own balance sheet for investments (only UBS and Goldman Sachs have these licences in China) or to trade in domestic securities. Ding says the firm is too young and inexperienced to get seriously into the derivatives game. This is how he sees the lessons from the financial crisis and outlook for this year, from the perspective of his client book: "Our investment banking in China is still rudimentary, basic underwriting, basic advisory work. Our leverage is only two or three times when banks have 12 times based on 8 per cent capital adequacy requirements, and Goldmans is like 40 times. "CICC is particularly less hurt because even for the domestic market we don't have a principle trading licence for domestic equities. We didn't get a chance to make a lot of money the year before, when shares went up, but we also didn't have a chance to lose money when shares went down.

"We use our capital to invest in bond paper, and Chinese bonds have been doing well because interest rates have been coming down for the last six months. We can trade in the overseas markets but we don't do it because we don't feel like we have enough capacity, knowledge and risk control. "We will be very cautious before jumping into principal trading, derivatives trading or constructing derivatives products ourselves. You need to learn how to use them first. "Overall we are still impacted because our client base is affected. Our clients have to postpone, delay, shrink, reduce the size of capital raising activities. "Most people expect the real economy will do better next year. If that assessment is correct, I guess financial markets will rebound at least six months beforehand. It's still possible that we will see a reactivated IPO market in the latter part of this year though there is no assurance there. On that we have been doing very well and continue to do well. "M&A, of course, is more difficult. A lot of fanfare, a lot of activity, but to close a deal and for us to make money out of it is not easy. [Nevertheless] I fully expect both the volume and money we will make will surpass last year.

"Things are really happening in debt restructuring. And there's massive consolidation in many sectors. Last year we saw telecommunications. This year we see transport, steel, shipping, even airlines, all these sectors will see consolidation. "So we will be involved in the domestic process of consolidation but I guess we will continue overseas investment activities in some sectors - the resource sector for sure. I think it's a good time. Even with losses we have suffered in first efforts, I think it's a good time. "With corporates, overall we are seeing shrinking profits, and most people think this first quarter will be the worst. I think that some have already hit the bottom; even in the steel sector we see recovery. "In terms of large companies I think it won't be that bad. It's not so much about the central government. Local government incentives [for growth] are huge. The Chinese economy is in the hands of local governments. "The banking sector is expanding credit rapidly. That money will be useful. The next stage of course one has to worry about the banking sector. I think banks will face some pressure but it's not likely to be as bad as before.

"The risk-control techniques, the assessment, loan recovery are all far better than before. Second, so much of this investment is government-related, and governments never go bankrupt. "On the investment banking side we're seeing the volume of business going down but the client list gets longer and longer and the help they need gets greater. Our staff are busier than ever, though we will make less money. We will just have to be prepared to be less paid. That's OK, we will still live on."