In China, interest rates are low as compared to India; mostly under six per cent. Whenever interest rates are too low, bank deposits look unattractive. Housing becomes favorite  proposition; for living and as an investment opportunity. Financed by generous bank loans, this eventually leads to a massive supply of unsold houses. The second attraction is stock market. People tend to save less and invest more. In China, on an average, every household invest 15% of its income in stock market. The exchange rate of Chinese currency  is not market driven. Unlike Indian Rupee which is floating currency in FX market, Chinese Yuan is more or less a fixed currency. In short, Chinese housing sector, stock market and currency never transmitted it's true strength and/or weakness. When the bubble burst, all this storm is witnessed.

To maintain the social stability, China responded  by making aggressive moves to devalue its currency,  prop up the stock market, inject money into the financial system, and generally stimulate the economy. But these are all knee-jerk decisions that may do more harm than good in the long run

The global reaction to China's devaluation of currency was greater than expected. However, if it leads to currency war among nations, it may  result  affecting China's own economy --undermine its exports and investment.

Indian financial system, with its own strength and shortcomings, is well regulated and robust to bear these jerks. In 2008, it passed through unscathed.   Despite our huge private sector, India is still a hybrid economy, dominated by public sector banks and state owned corporations. That means our financial system is shielded from the impact that a stock market crash would have in a western style private banking system. Wall Street Journal reports, "India hasn't been rattled as badly as Brazil, Russia or South Africa. Its international reserves are ample, and it isn't highly dependent on foreign capital to fund imports".