Is China or India more financially open?

Financial Openness of China and India

“…The answer could lie in a mix of the need to fund current account deficits in India, the greater rigour with which the controls are enforced in China, the longstanding multinational operations of Indian private firms to arbitrage onshore and offshore markets (Subramanian 2009), and a larger footprint of global banks in the Indian domestic banking market. Future research could provide different explanations (Ma and McCauley 2013).…”

“…Since the estimated ß < 0, the speed of convergence, or half-life of a shock, to the premium can be taken as -ln(2)/ln(1 + ß). Table 12.3 shows mixed results, though for both the Chinese and the Indian markets, the half-life fell in half of the cases after the GFC, indicating more integration (Ma and McCauley 2013). Again on this measure, the Chinese equity market on average remained three to five times more segmented than the Indian equity market.…”

“…We wish to thank Claudio Borio for comments and Bat-el Berger and Tracy Chan for their excellent research assistance. This chapter is partially based on Ma and McCauley (2013). Views expressed are those of the authors and not necessarily those of the BIS.…”

“…Another could relate to the emerging market sell-off in the wake of the expected US Federal Reserve's tapering signal mostly in the third quarter of 2013, which most hurt deficit emerging economies. Of course, one can ask why this last particular shock was so asymmetric and different for the renminbi and the rupee (Ma and McCauley 2013;McCauley et al 2014).…”

“…The closer this 'cross-market price premium' is to 100, the higher is the degree of onshore and offshore equity markets. Our Chinese index in Figure 12.4 resembles the commercial 'Hang Seng China AH [A: Shanghai; H: Hong Kong] Premium Index' (Ma and McCauley 2013).…”