Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking

China and India financial cooperation research

Author ZhangLuGe
Tutor HuLieQu
School Yunnan University of Finance
Course World economy
Keywords financial cooperation economic symmetry VAR model Path
CLC F832
Type Master's thesis
Year 2014
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After the U.S. subprime crisis in2007become the global financial crisis,developed economies grow slowly, economic development is generally in a state ofstagnancy, Space is very small for developing countries in order to maintain andexpand the trade cooperation with developed economies, developing countriescontinuously one-sided emphasis on trade and economic relations with the developedmarkets, leading to over-reliance on developed economies, therefore, in order toenhance the autonomy and independence of developing countries, developingcountries should pay more attention to diversify trade and economic cooperation.Cooperation between China and India will become a new bright spot to build Asiacooperation and the new engine of world economic growth. The Fed began togradually withdraw quantitative easing policy in the early2014, facing turbulence infinancial markets and capital flows volatility issues. Investment may be adjusted, andsome investment capital outflows. If a country has a fragile financial system, If thereis domestic vulnerability, it could lead to more drastic capital outflows and exchangerate adjustments. In this context, the deepening of financial cooperation is necessaryand urgent for developing countries.To actively carry out financial cooperation between China and India is part ofthe South-South cooperation and an important part of the whole Asian economicintegration, not only can improve the developing countries’ financial strength, but alsoenhance Asia political cohesion and international influence, thereby expandingthroughout the region in the international voice matters.On the current conditions, the advanced form of cooperation between China andIndia, the target distance the regional cooperation-monetary cooperation-still far.Financial cooperation between China and India is also very little research in this area,this article only as a prospective study, taken from financial institutions andmacro-policy level have gradually progressive approach to promote the integration offinancial markets, regulatory cooperation, convergence of financial legal system can take Europe monetary Union harmonized minimum standards, and gradually reacheda series of agreements, it is a better way.According to the actual development of China and India, this paper elaboratedmotivation financial cooperation between China and India, on the one hand, theleaders of China and India visits and political trust, providing opportunities for thedevelopment of bilateral cooperation, while the construction of the BRIC countriesand cooperation mechanisms BCIM corridor is further deepening of bilateralcooperation; Secondly, according to Mundell ’s theory of optimum currency areas,based on the existing basis for cooperation, a more comprehensive analysis of thecurrent situation and the financial feasibility of the bilateral cooperation, provide astrong basis for the Sino-Indian financial cooperation by the use of VAR modelsanalysis; Once again point out the existing problems and obstacles of the Sino-Indianfinancial cooperation; Finally, design a clear development path for the future ofSino-Indian financial cooperation. This article focuses on the Sino-Indian financialcooperation within the scope of future long-term economic growth throughout Asiafor institutional arrangements, cooperation from bilateral financial cooperationtowards sub-regional cooperation and finally to the whole region, and to achievefinancial deepening Sino-Indian cooperation follow the easy to difficult, from basicto high-end, from the local to the whole idea.Overall, the macroeconomic fundamentals and financial cooperation betweenChina and India have certain symmetry, it brought a good opportunity for furthercooperation between the two countries. Also found that a coordinated monetarypolicy is more influential for the Sino-Indian financial cooperation. While there aremany obstacles to China and India trade integration and the financial system, theactual operation of the cooperation mechanism is still not perfect, it also needs towork together to be closer in-depth cooperation between the two countries. But it isvery broad for the development prospects of Sino-Indian financial cooperation in thelong terms, it is worth the wait.

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