The Great Chinese Bank Run

American stick-up man Willie Sutton famously explained that he robbed banks "because that's where the money is." That's the same reason international financial institutions are snapping up stakes in China's banks. Last week, Royal Bank of Scotland (RBS), Britain's second-largest lender, announced that it is leading a consortium to buy 10% of Bank of China (BOC), one of the mainland's state-owned big four, for $3.1 billionjoining 12 other foreign financial institutions that have secured stakes in China's banks.

Such deals carry risks: while China's economy is as hot as ever, most of its lenders are abysmally managed. China has already...