Paper Tigers
Report

Paper Tigers

Chinese and Indian Capital Markets

Paul Kielstra
EIU, 2014
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Editorial Rating

8

Qualities

  • Comprehensive

Recommendation

The Chinese and Indian economic miracles get plenty of attention, but a look beyond the headline growth reveals their capital markets’ shaky structures. Paul Kielstra of the Economist Intelligence Unit leads this tour of the Asian financial giants, whose real economies have far outpaced their capital markets’ capabilities. His informative report explains why, despite their high savings rates, Chinese and Indian workers are not keen to put those savings into their respective national stock and bond markets. getAbstract recommends his text to investors interested in a promising but financially risky part of the world.

Summary

With their huge populations, China and India have long been “demographic giants.” Now, they’re economic titans, too, ranking as the world’s second- and 10th-largest economies, respectively. Their capital markets reflect this growth: China’s Shanghai and Shenzhen exchanges boast a combined market capitalization second only to US exchanges. India’s Bombay Stock Exchange has 5,100 companies listed – more than any country in the world – although the collective value of India’s markets ranks sixth worldwide. Yet despite their impressive size, markets in China and India don’t efficiently allocate capital. In both nations, ...

About the Author

Historian Dr. Paul Kielstra is a contributing editor at the Economist Intelligence Unit.

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