A new book, Red Capitalism, takes a critical look at the China’s financial system. In late 70’s China virtually had no banks. For the next 3 decades, the senior leadership in China meticulously built a formal financial system.

But concerns still remain. Beyond the facade, the book explains, lies a primitive banking system that deals in arcane and secretive transactions with the state entities. So much so that, it is hard to rely upon any data about Chinese banking system.

In comparison, India seems to have done a much better job, with efficient price discovery, strong regulatory regime and higher transparency.