China Economic Review’s February cover story looked at how and why assets in the care of China’s fund management companies soared to US$451.8 billion last year, up from US$118.2 billion in 2006.

Now we have some fat management fee statistics to match. Fund consultancy Z-Ben Advisors was expecting to see a substantial increase in the cut taken by fund managers for sinking people’s hard-earned cash into what was then a buoyant A-share market. But Z-Ben declared itself “shocked” as 2007 management fees came in at a whopping US$4.03 billion, up from US$813.9 million last year.

Let’s put it in context: The Shanghai Composite Index (SCI) more or less doubled in value last year; fund management assets nearly trebled; fund management fees grew by close to five times.

Of course, since then things haven’t been quite so rosy. The SCI fell 29% in the first quarter and it is thought assets under management decline by 24%. This doesn’t bode well for fund managers who dream about a new Ferrari for Christmas.

So does this mean the million-dollar bonus - reportedly first handed out (FT.com, subscription needed) to several Chinese fund managers last year - will be short-lived? Almost certainly not. Pay is tied to performance and there are few people who would bet against the market to rebound (eventually).

In addition, there is still a shortage of fund managers in China who can really perform. And when times get tough you really need a guy who can pick his stocks.