While talking about developing economies, no analyst can ignore China and India—the fastest growing economies of the 21st Century with strong economic fundamentals and reform process. In many ways, the economies of China and India are similar. Economic reforms, rapid economic growth, huge and fast urbanization, a new consumerist era with high spending and high saving, increased organized malls and booming housing sector are some of the similarities that persist in both the countries. Despite these affinities, there exist several dissimilarities. Both the countries started economic reforms at different stages of their growth.
China started its reform process in 1978 whereas India embraced it in 1990. Though India is following the Chinese model of economic reform it should not be compared with China's economy at all as India's economic reforms began at a much later stage. It is only recently that the Indian market economy has started showing maturity and beginning to be recognized as a force to reckon with. The Special Economic Zones (SEZ) policies and the IPO markets of both the countries are different. While India's IPO market and the SEZ polices have just began to takeoff, China has already proved successful with huge IPO's and SEZs.
Corporatization in India is at a nascent stage today. Only recently, the Indian corporates have started looking beyond borders and are trying to globalize themselves. With the taking over of Corus by Tata steel, a new era of Indian participation in the global corporatization has begun. Terms like good corporate governance, IPO grading and margin trading are the new concepts in the Indian capital market today. The total market capitalization of the Indian stock market is yet to reach the $1 tn mark, whereas, the Chinese capital market has already crossed that milestone. However, it is worth comparing the capital markets of China and India are regarded as the fastest growing markets in this century. The future of world economy, mostly, will be influenced by these countries. |
