After India's stock market hit record highs this week, a Chinese newspaper said on Friday that it was crucial to prevent and reduce financial systemic risk to restore confidence in China's stock markets and economy.
"Generally speaking, stock markets are a mirror of the economy. So the divergent stock market performances in China and India actually reflect the different economic focuses of the two countries in the years to come," it said.
On Tuesday, India's Nifty 50 broke the psychologically important 10,000-point mark for the first time, while the Bombay Stock Exchange's Sensex index hit a new high of 32,374.30 points.
The Nifty 50, which is composed of the country's 50 largest companies traded on the National Stock Exchange, has gained more than 20 per cent so far this year, becoming one of the world's best-performing benchmarks, the Times said.
"Those gains have left the Chinese mainland stock markets in the dust, with the benchmark Shanghai Composite Index eking out a mere 4.64 per cent year-to-date rise as of Wednesday.
"To some extent, the divergent performances simply show the different levels of economic development in the two countries.
"In India, the government of Prime Minister Narendra Modi has been especially aggressive this year in pursuing policy reforms.
"Encouraged by the implementation of demonetization and the introduction of a Goods and Services Tax, plus the easing of foreign direct investment regulations, overseas institutional investors have begun warming to Indian stocks.
"Expectations of an interest rate cut and robust economic growth have also enhanced investor confidence in Indian equities," it said.
The Times said: "To restore confidence in China's stock markets and economy, it is crucial to prevent and reduce financial systemic risk. Compared with temporary outperformance, steady growth is what the A-share market really needs now."