China and India in a demographic perspective – a giant future issue

15:07 by Hubert Fromlet, Kalmar

In my latest blog – to be found below this article in chinaresearch.se – I summed up a number of mostly economic areas which usually are influenced by demographic developments. There exists indeed a lot of scientific evidence showing many examples of relationships between demographics and, for example, labor markets, education or social welfare.

I certainly will come back to the topic of demography in the future for focusing on different angles. Today, however, I will mainly look at the demographic outlook for China and India. Many pages could be written about this specific issue. But the limited volume for this blog does not allow for extended articles or papers.

Statistics tells a lot – despite shortcomings

We know that there often exist major difficulties for responsible authorities to count more or less exactly the number of their country’s population. Human or administrative resources may be too limited. A substantial part of the population may be migrating farmers accepting time-limited works in cities, often badly paid. Many workers also stay temporarily abroad for making (somewhat) more money – often under quite miserable conditions. We also know very well about the destiny of many refugees having left their home countries.

Consequently, we have to accept the population statistics that is available. There is no choice if demographic trends in emerging or very poor countries shall be analyzed. Foreign companies entering or making business in such a kind of country certainly want to have a population number for the country they are (interested) in. Therefore, I use to follow for my own purposes https://www.worldometers.info/world-population / – but there are many other sources as well and quite easy to find.

Important data for population statistics:

China India
Population (billion, 2020) 1.447 Trend since 2000 1.400 Trend since 2000
-yearly change 0.39 clearly decreasing 0.99 decreasing slowly
Median age 38.4 clearly increasing 28.4 increasing slowly
Life expectancy 77.5 70.4
Fertility rate 1.69 basically unchanged 2.24 decreasing slowly
Urban population (% of total) 60.8 strongly increasing 35.0 increasing slowly
Share of global population (%) 18.47 clearly down 17.7 increasing slowly

Of course, there are many more indicators and specific calculations that confirm additionally that India has more favorable demographic preconditions than China. Furthermore, China will increasingly feel the consequences of its perennial one-child policy which was relaxed only a few years ago after having applied this kind of birth control during 35 years – also having led to an increasingly uneven distribution between men and women – with negative demographic consequences.

Nobel Prize winner Amartya Sen has been talking in such a context about the “missing women” which will be a burden for China many years ahead. The continuous urbanization process will give negative contributions to demography as well since the urban female labor force increasingly seems to change or reduce their family ambitions.

Demography favors India but more (other) progress is needed – China aims increasingly at new sources of economic growth

Altogether, China’s demographic outlook does not look encouraging. But what about India? The briefly summarizing table above seems to prove that India clearly will turn out to be the winner in the future demographic race and, consequently, the country with the better growth perspectives as many analysts predict. Indeed, this outcome could come true.

At the same time, we should recognize that also India will be facing growth obstacles in the forthcoming decades. Examples of these obstacles are, for example, India’s slow political reform procedures, insufficient financial resources, shortcomings in infrastructure and lagging broad education systems, etc. As one of India’s leading economists told me a few years ago, India is primarily enforced to improve and broaden its educational system – also geographically – for visibly benefiting from the demographic advantage.

Since we do not know to what extent India will be able to improve its weaknesses – education included – it remains uncertain whether India with its comparative advantage from demography will surpass China in GDP-growth terms in the very long run. China’s ambitions for the future are clearly based on mainly good infrastructure, broad education, new technology and the obvious upgrading of private consumption to counteract the negative demographic challenges. These efforts should be observed on a regularly basis.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
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