IPOs fail to stop China sliding in financial development rankings
November 02, 2009 | BY
clpstaff &clp articles &China has dropped two places in the latest global rankings of international financial systems and capital markets. The World Economic Forum's Financial…
China has dropped two places in the latest global rankings of international financial systems and capital markets.
The World Economic Forum's Financial Development Report 2009, which was co-authored by renowned economist Nouriel Roubini, ranks countries based on 120 variables including institutional and business environments, financial stability, and size and depth of capital markets. A country receives a final score based on seven pillars which include business environment and financial stability; most countries' scores dropped significantly this year.
“The change in scores does demonstrate the implications of the downturn on our assessment of the long-term development of financial systems,” said Roubini.
This year, China is placed at number 26 with a score of 3.87 out of a maximum of seven points – a drop of two places from its 2008 position. The Hong Kong SAR rose three places to fifth position (behind the UK, Australia, the US and Singapore). Mainland China's score dropped by fewer points relative to 2008, however.
A closer look at the figures reveals that China is performing relatively badly in areas such as financial sector liberalisation, corporate governance, legal issues, infrastructure and financial market sophistication. But the country scored highly for the cost of contract enforcement and topped the rankings for IPO market share.
The full report, which can be downloaded from the World Economic Forum website, also reveals considerable improvements in the development of China's equity and bond markets.
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