One way of thinking of the occasional recapitalizations of the banks in China is as a fiscal process, in which the banks provide loans to enterprises that are in effect repaid by the state by later recapitalizations.
It appears that progress is being made in reforming the financial system, but as of now it remains a point of vulnerability and an obstacle to a rapid opening of the capital account and flexibilization of the exchange rate. China faces the problem of a rapidly ageing population.