If ever a metaphor can be used here, China is perhaps the dancer that missed the ball. And because it has been that way since 1949, she must be regretting why she never chose the capitalist path when the People's Republic was proclaimed.

Only if she had done that, she would have surpassed the United States way ahead and altered conceivably the course of history, as we know it.

After all, isn't she Asia's rising star in the economic and global field that its 1.3 billion people, so promises? And also isn't she the nation that most nations look up to with awe, mixed with respect and fear, to emerge as the next counterweight to stand up to the United States in global geo-politics and geo-economics?

Assuming if she gets her fundamentals right, she may just possibly get there. But because the question is mainly about fundamentals, what is nominally absent is the nation's lack of basic understanding in erecting a free trade system along that of a US or European model.

Until and unless it does that, its companies and economy will be seen through the prism of the now on-going saga involving scandal tainted aviation behemoth, China Aviation Oil (CAO).

Next to the Barings debacle that sullied the name of Singapore some 10 years ago, the present scandal has much of the complexities of the former and for the record was also able to catch the entire Singapore stock market napping.

But then what the whole episode underlies is not to the on-going euphoria - misplaced at best - but to if China is indeed ever worth taking the risk and going for.

For Singapore companies and world wide corporations' Malaysians included, the sobering means through which the news was greeted told once again, that all is mostly not settled on the China front and that caution before adventure should be watchword, henceforth.

High stakes

Yet even as how the scandal unfolds, what is unmistakable is the high stake of safeguarding the nation's reputation. And according to the country's former premier, Goh Chok Tong, the city's reputation as a financial centre will hinge on how it handles the crisis professionally.

The larger question however, is simply about the high stakes gamble that the whole issue of China is turning out to be?

From Hong Kong, Taiwan, London and New York, it is common knowledge that investing in China is a dicey, high roller game.

In the United States, brokers point out routinely to clients to the danger of investing in China's 'high-fliers' on the New York Stock Exchange and the Nasdaq.

Business magazine Fortune said it best when it pointed in its Dec 13 issue that China-owned firms are prone to 'inflated IPO (initial public offer) prices, unexpected dilution, misplaced proceeds and even bankruptcy'. Investing in them, it added was gambling in Las Vegas.

A gamble or not, the stakes and the way commerce is practised can look daunting.

In China companies are used to operating above, below and around the law. And because that has been their corporate culture, they may just do likewise when listed in foreign exchanges.

Yet what is known about the Middle Kingdom is how little of intellectual capital it takes for one to plough his feet into the nation. Its equity and share markets are in shambles and seldom can anyone make a guess to how much they can resist a speculative mania.

Moreover, there is seldom any correlation between economic growth and the price of bonds and the performance of the equity markets.

So even as many people invest in the country, just that many are aware of the inherent pitfalls.

Despite all these dangers, people continue to invest in the country even as China companies feature less of transparency and corporate governance; all for the simple reason in the nave belief that things cannot really get that serious. But these people can get dead wrong about their desires.

According to Standard & Poor's, "Complex corporate structures and unreliable accounting make it difficult to perform substantive analysis on some China-related companies,".

"On the accounting side, the problem of limited disclosure is compounded with problems of compliance."

Command economy

That regrettably is not what many had thought of a nation touted to be the world's most dynamic economy. It had an unimaginably huge market, a population of 1.3 billion and now a rapidly growing influence in the world.

So what is therefore wrong with it? Blame its command economy. That legacy of strict strictures still permeates many aspects of life in the country and the feudal set-up around which the late Chairman Mao based his social and economic principles around; cannot but all disappear through Deng Xia Peng's modernisation drive.

It takes a larger, Herculean effort than merely to seek an economic revolution without an accompanying revolt against old social practices of favouritism over meritocracy. What the Chinese authorities should have attempted was what former Soviet president Mikhail Gorbachev did in the1980s, institute perestroika before glasnost.

At least in that way, there will still be some time left to head to the dance that she otherwise missed when opting for socialism in 1949.

JAYA PRAKASH lectures in journalism at Calton Education Centre in Singapore.