How demography will determine the future of India and China

Updated: Nov 22

The biggest difference between China and India is the number of children being born in each country. This is the one definitive difference between the two, and will determine their destiny.

Brief interaction between President Xi Jinping of China and Indian Prime Minister Narendra Modi on the sidelines of the G20 meeting in Indonesia.

Demographics can likely change the tide on the economic and strategic competition between India and China. The demographic trends provide us with a statistical picture into the population of a country and could be a powerful resource into projecting the future course of a country’s development.

With this much significance being assigned to the role of demographics in determining the economic trajectory of the countries, it would make sense to look at the two most populous countries of the world- India and China. The two countries occupy the status of the fastest growing economies of the world as well. There is also a clear sense of competition when it comes to their regional and international influence. However, there is merit in making a comparative analysis to the demographics of both the countries and its impact on their projected economic growth.

Before delving further into the comparative analysis of the demographic trends, let’s first look at what these factors mean.

What are demographic factors?

The demographic factors relate to the characteristics of a particular population. A country’s population can be defined based on the age, sex, income as well as employment rate. Even the increase as well as decrease in the population is defined by the factors such as the birth rate and the death rate or mortality rate. The demographic trends in the population would primarily include the changes in the average age, death rate or the birth rate. The changes in the trends would in turn also affect the economic growth potential and the resulting overall development of the country.

This brings us to the importance that needs to be attached to analysing the demographic factors and their projected changes over the years. This not only allows us to predict the growth potential of the country overtime but also provides a clearer picture on the focus areas for improving the demographics in order to enhance the growth potential.

With this context, an objective analysis of the demographic trends can be made between the populations of India and China so as to understand what road these two countries would take in terms of economic growth and development.

Number of Births

The first focus area, when it comes to analysing the population growth is the birth rate statistics. This not only provides us with the projected increase in population but would also add to the statistics on healthcare, economy and education. The birth rate can be measured by calculating the number of individuals born in a population within a given period of time. This statistics adds directly to the population growth of a country.

Coming to the analysis between India and China, one of the most significant findings based on the review of data from sources such as the China National Bureau of Statistics and the United Nations World Population Prospects shows that the gap between the birth and death rates of China is closing far rapidly as compared to that of India.

Consider the graphical representation above. This chart compares the statistics of the number of births and deaths in China from 2012 to 2020. It is curious to see that even as the One Child Policy of China ended in 2016, the rate of birth slowed down in the subsequent years. The number of births in the country decreased rapidly from 2016 to 2020. Analyses maintain that the reduction in the number of births in China is largely related to a higher cost of living and the conscious choice among the Chinese people to not have children.

In contrast to the downward sloping graph of China’s birth rate, India’s birth rate has remained primarily on the similar trajectory in the period of 2012 to 2020. While a lot of the reasons for a higher birth rate across time in India can be attributed to the social and cultural factors, there is no denying the fact that a high population would have an impact on the economy. The number of births in India in 2020 stood at 24 million, the reduction in the number of births in China came down to 10 million by the same year.

In the case of populous countries like India and China, population is often regarded as a potential asset and while the rate of decline in births is greater in China than that of India, it points to a future trend as well. The latest projections show that the predicted rise in the population of India far surpasses the rise of population in China.

India’s population is likely to grow to 1.5 billion by 2099 while China’s population is likely to decrease to less than 800 million. If we carry on from the data collected from 2012 to 2020, the similar rates of birth are going to contribute to the projections depicted in the graph above.

These population demographics are an important vantage point to understand the trajectory of the economic growth of the countries to be predicted over the next few years. India is going to surpass China’s population by a huge margin if this trend continues. This would have an effect on India’s labour market potential as well. If this trend is coupled with the correct policy initiatives in the education sector, the employment programmes as well as healthcare, the population rise could be the biggest asset that India would possess in the years to come.

Number of Deaths

The analysis of births are usually coupled with the analysis on the number of deaths. This is done to get a picture of the change in the total population over time. There have been greater headways and developments in healthcare and technology to account for the decline in the death rates of the population. However, it is to be noted that the number of deaths in both the countries has remained partially constant from 2012 to 2020 with a rise from around 9 million deaths in 2012 to 10 million in 2020. The global pandemic could account for a steep rise in the deaths around the world in 2020 and the following years and there still needs to be a projected data for predicting the number of deaths over the years.

The question of age

The demographic average age of the population forms another major factor to base the analysis of any country. India is often regarded as a 'young nation' with a median age of the whole population below the age of 29 years. As per data, around 67 per cent of the Indian population falls under the working age group of 15 to 64 years. If the demographic dividend of the country’s population is employed effectively, it can have a huge impact on the gross domestic product (GDP) of the country with a likely rise to $40 trillion by 2047. However there need to the greater investments in employment and education opportunities to achieve this massive goal.

Coming to China, as the graph above predicts, there is likely to be a steep reduction in the working age population of the country. China, as a country, would age rapidly if the birth rates continue to decrease as they do. This would mean a lesser number of employed people contributing directly to the growth of the economy.

Based on these figures, it is clear that India is going to surpass China as the most populous country; however, this factor could also become a tool for the country’s economic advantage over China. Demographic factors can provide us a detailed picture of the trends in the population but they may not be the whole picture. In order for India to leverage this advantage in population change over China, it needs to use the working age population as an asset to the country by investing in the population as well as the related sectors of healthcare and education. If this trend continues, India is likely to overtake China in the race of a rising economy.

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