Institutional Economic Analysis Of Barriers To Investments Between China And India

China and India are large developing countries in order to achieve catch-up after independence has implemented the reform and opening up, which rapid economic development, the development of similar conditions. And especially under the influence of the2008US subprime mortgage crisis and the2011European debt crisis, Europe and other developed national economy is still in a weak state, to China and India to establish a channel for mutual development and good investment opportunity. In recent years, bilateral economic and trade cooperation between China and India continue to increase and optimize the way in addition to foreign trade, mutual investment has become the main form of bilateral economic and trade cooperation. However, mutual investment between the two countries has been in a state of slow development, the overall level is not high.Therefore, this article first to the present situation of the mutual investment between the two countries has made the preliminary analysis, from the perspective of institutional economics, the use of four levels of system evolution analysis and the theory of transaction cost analysis from different aspects of the institutional obstacles to hinder mutual investment between the two countries, respectively is:first, the first level from both China and India’s religion, caste, and cultural perspective, analyzes the informal institution to bilateral investment obstacle factors and causes; Second, the second level from political, legal and economic system of the three basic environmental analysis of the basic system of the two countries (political system), and there are large differences of insufficient (corruption, legal system and improve the level and degree of liberalization of the market economy) hinders the investment between the two countries; Again, the third level from the admittance of foreign capital, the examination and approval, tax and labor employment system and so on governance mechanism analysis of the two countries in the defects of the system of regulation (approval time is long and complex program, etc.) that exist in a big barrier to investment in both countries; Finally, the fourth level from the Angle of the short-term resource allocation of market economy system, analyzes the two countries in the market supply and demand factors and industrial structure, etc, do not match or the host country factors of cost is higher than formed in the course of mutual investment between the two countries. According to analysis the problems and influencing factors of the four levels of corresponding policy implications.Results show that the system of mutual investment between the two countries obstacle factors mainly include:basic system of environmental differences, the two sides more friction; Access approval process with heavy and complicated is not reasonable, increase the investment into cost; Labor structure mismatch between supply and demand and investment industry, improve the investment into barriers.Conversely, between the two countries in view of the institutional factors of mutual investment barriers of measures should be taken as follows:positive sign bilateral and multilateral investment treaties, promoting international cooperation in order to reduce the friction between the two countries; To optimize the access approval process and regulatory mechanism, lower the transaction cost of the investment; Optimize market environment, improve mutual investment matching degree.