Comparative Research On China And India Financial Reform

The two major developing countries, China and India both are ancient states with high civilizations, and have a certain degree of similarity in the population size and natural resources. Meanwhile the timing of their financial reforms are also quite similar. China first made the progressive economic reforms from 1978 systematically. After the 1991 crisis, India began the liberal, open, international economic reform in order to break the bound of the economic system and ease the crisis situation at that time As finance is the core of the economy, the economic reform must be accompanied with a series of financial system reform, also the financial reform happened in the context of economic reform. The paper shows the necessarily of making the two countries'international financial reforms with regarding to the requirements of economic reform, improvement of financial efficiency and the globalization of the finance. It also makes descriptions and analysis in details on the two countries'financial reforms mainly from commercial banks, securities market and foreign exchange system reform, with the progressive and radical financial reform strategies. It is of great theoretical and practical significance for China to make further financial development through comparison of the two countries'financial reforms and we can also learn from the experience which is suitable for China.By making the summery of financial deepening and financial constraint theory the paper analyses the characteristics of China and India financial reforms and compares the strengths and weaknesses of financial reform in China and Indian by using the empirical research methods and combing of induction and deduction comparison methods. It could be concluded from the experience of the Indian financial reform that China gets important implications from the reform model of India's commercial banking liberalization, privatization, the evolution of international stock market and exchange rate market-oriented reform. Considering the China's economic, financial development status and the process of financial development in China and India, we should take more proactive measures to make solid financial co-operation basis for China and India.