Capital Market Development: The Race between China and India

Abstract

China and India are the world's most watched countries. The common knowledge is that India's financial system is ahead of China's in terms of sophistication, but not in terms of volumes. India's market depth is also considered more than that of China, though China is gradually catching up. China attracts almost ten times more FDI, when compared with India. China accounts for more than 4% of the world's financial assets, whereas India holds less than 1% and this difference cannot be fully explained by the two economies' size.

The paper will present a comparative analysis of the capital markets of the two countries.

The paper also discusses the development measures taken by both the countries for their capital markets and their assessment their off.

Keywords: Capital market development, India, China, Indian stock markets, chinese stock markets