* At first sight, the financial systems of China and India are quite different from each other: the relatively new institutions of the former, with its massive banking sector, seem to contrast sharply with the colonial roots and burgeoning equity market of the latter.
* Yet these two economic giants share a common handicap: excessive government intervention that distorts the allocation of capital and thus dampens growth.
* Reducing government involvement and increasing its responsiveness to the market are the keys to progress.
* Addressing the deficiencies of these financial systems would increase GDP by up to $321 billion a year in China and $48 billion a year in India, sharply boosting growth in both countries.
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