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“Finding reliable, useful financial information is a real problem that anyone wanting to work at, sell to, buy from, or invest in a Chinese or Indian company must face. I am often asked for guidance in solving this problem and have found that the answers are different for the two countries.

“In China, can I believe the financial information in a company’s annual report?

“Not really, I say. The annual report does not serve the purpose it does in market economies, that is, to communicate reliable information. …

“What about analysts’ reports on Chinese companies?

“Two issues are at stake here. First, most of the domestic assets of Chinese companies are not publicly listed. … Second, Chinese financial analysts are not independent but state-owned or state-controlled, as are the companies on which they issue reports. …

“Is it easier to find reliable information about a company in India?

“Yes. First, as a result of a legal system derived from the common-law tradition, annual reports provide the basic rudiments of information that Western observers expect, and familiar rules govern corporate disclosure. Real-time stock market data are readily available on all publicly traded companies.”

From Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours , HBS Press, 2007.

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