Comparative Study On The Effect Of China And India's Financial Development On Income Inequality

China and India,as the two most populous countries in the world,have attracted worldwide attention.From 2003,Huang Yasheng proposed "the fight of dragon and elephant ",and by 2015,India's economic growth surpassed China for the first time,the comparison between China and India has become the focus of academic attention.While China and India are experiencing rapid economic growth,income inequality in two countries is deteriorating.To solve this thorny problem,the two countries tried to make a big fuss about the financial industry,but whether this move can ease income inequality? Whose effect is more ideal in China and India? Therefore,to verify whether the two countries can alleviate the financial development situation of income inequality,financial development strategy and further comparison of who is more effective can not only enrich the financial development and income inequality comparison theory,but also can provides a new perspective in the financial development and income inequality in Chinese and India,and to formulate the relevant policy recommendations the implementation.Based on previous theories of comparative financial development and income inequality,this paper brings forward the corresponding hypothesis that financial development between China and India have different effect on income inequality,the reasons mainly reflect the relationship among the two countries in economy,the different conditions of education,government purchasing,initial system,culture and each of the different variables,and this relationship is mainly reflected in the "inverted U" relationship between the two countries in economic growth and income inequality.In order to verify this conjecture,based on the actual situation of this study to compare initial conditions of China and India.Because the data of India's income inequality in the SWIID database were only counted until 2012,there was a large area of data missing before 1992,so as to ensure the consistency of statistics and the balance of data,selected the relevant data of China and India from 1992 to 2012,.To verify the results,using quantile regression and panel quantile regression model.The whole process of the research with a solid theoretical foundation,analyzing the impact of financial development on income inequality by using the method of comparative economics.The results verify the theoretical hypothesis previously proposed.First of all,China and India financial development have different effect of effect and degree on income inequality;secondly,there is a "inverted U" characteristics between economic growth and income inequality in India and Chinese,that is,the impact of financial development on income inequality will be influenced by economic growth on income inequality and results in different results.;thirdly,there are two ways of financial development China and India have different effect on income inequality,a country of different initial conditions,and another is the different mechanism;finally,education,inflation and unemployment on income inequality has a positive role in promoting,between trade and income inequality has a negative effect.On this basis,the paper puts forward the corresponding policy recommendations.First,optimizing the financial structure,to further promote the development of banking industry and improve the securities industry in the proportion of the financing channels,and strengthen its supervision;secondly,the implementation of education fairness,promoting the optimal allocation of educational resources in the society;finally,promoting the development of foreign trade on "Introduction" and "going out" two aspects,and promoting the development of the domestic manufacturing industry and domestic brands in the world.