An overwhelming 77 per cent of investors lost money on mainland stocks this year, with only 12 per cent making a profit and 11 per cent breaking even, according to a survey by China Securities Journal and Huading Market Survey Corp of Shenzhen.

Only 1 per cent plan to increase their investments in mainland stocks, while 25 per cent will reduce their investments, according to the poll of 2,671 small and medium investors in 12 large cities, including Shanghai and Beijing.

The chief reason for their poor performance was China's state share reform, involving plans to make state shares tradable which were expected to drive down share prices, according to 46 per cent of those polled. The second reason was low investor confidence in the Shanghai and Shenzhen exchanges. Other bearish factors included high raw material prices and the mainland property market.

However, Zhong Wei, a professor at the Financial Research Centre of Beijing Normal University, told the South China Morning Post that the loss of investor confidence was the main reason for the dismal performance of China's stocks this year.

This is the fourth consecutive year China's securities industry posted a loss, Mr Zhong said. "It's a case of despair growing into total hopelessness. Investors have basically lost faith in the stock market."

There were no badly needed reforms of China's stock markets on the horizon, while the state share reform was an inadequate measure, he said. "It's easy to talk share reform but difficult to do."

For the first 10 months, mainland share transactions totalled 5.55 trillion yuan. This was 26.25 per cent, or 1.97 trillion yuan, lower than the same period last year, according to mainland securities statistics. The revenue of mainland securities firms in the first half of this year was about half that of the same period last year.

So far this year, 33 billion yuan was raised from mainland stock markets, about 60 per cent less than the 83 billion yuan raised last year, according to incomplete mainland statistics. This included 15 initial public offerings, compared with 98 offerings last year.

Mr Zhong suggested several measures to revive the flagging stock markets.

In the short term, buying and selling of stocks should be allowed on the same day, whereas Chinese stocks can be sold only one day after they are bought. In the medium term, the securities industry should offer more financial products. For the long term, the listing and trading procedures of the exchanges should be more transparent and market-driven.