Chinese and Indian demographies will be rather different three decades later. What kind of economic outcomes are the differences expected to create?
With 1.4 billion and 1.2 billion people respectively, China and India currently account for 37% of the world population. Thirty years later, they are expected to account for roughly the same share of world population. However, some other fundamental changes would have occurred by then.
In another 20 years, China is expected to be caught up by India in terms of the number of people. The UN projections on population indicate that in 2030 the two countries are expected to have around 1.4-1.5 billion people each, with India marginally ahead of China. The period 2025-2030 will be a significant time zone for China?s demography, with the rate of growth of population reducing to zero during the period. By then, China is no longer expected to experience net additions to their population. The number of births will match the number of deaths, with the latter gradually overtaking the former to push China into a negative rate of population growth after 2030. This would mark the culmination of a remarkable demographic transition in China. It will indicate the end of a period comprising almost seven decades during which China would have reduced its rate of growth in population from 2.6% (mid-1960s) to less than zero.
The larger demographic changes will be accompanied by more nuanced and significant transformations. The most discussed and familiar of these is the change in the relative weightages of working age populations (15-60 years) in total populations. India will remain a younger country than China in 2040, with a median age of 35 years compared to 44 years in China. China?s population is expected to age faster over the next three decades, with the percentage of sixty-plus people in total population projected to increase from 12.3% in 2010 to 27.5% in 2040. The corresponding increase in India?s case is expected to be from 7.5% in 2010 to 15.6% in 2040. The difference in ageing will influence the proportion of the working age populations yo total populations. At present, the working age people in China and India comprise 67.8% cent and 61.7% of the total populations, respectively. Thus, the ?demographic dividend? of having a larger working force cohort is more for China right now. However, come 2040, the proportions are expected to change to 62.4% for China and 64.6% for India.
One needs to be cautious before claiming that the change will impart a decisive comparative advantage to the Indian economy vis-?-vis China. In absolute terms, the proportions imply that in 2040 there will be around 1 billion working age people in India compared with 0.9 billion in China. Given the sizes of the two economies, the difference is marginal. However, given that India will continue to experience net additions to its population well after 2040, the working age population is expected to increase further. Thus, India?s expected higher returns from the demographic dividend vis-?-vis China are likely to manifest more over a three-decade-plus time horizon from now.
The evolving demographic outcomes entail a complication for India, which is usually overlooked in the euphoria over the demographic dividend. The density of India?s population (people per square kilometre) is projected to increase from 369 to 476 over the period 2010 to 2040. During the same period, China?s population density will rise from 141 to 152. India will have to handle the major challenge of accommodating its population that is growing at a faster rate than China?s within a land area that is much smaller than China?s. The obvious implications of an adverse land-man ratio are greater pressures on natural resources and public goods. Inadequate supply responses on these fronts can erode much of the demographic dividend.
?The author is a visiting senior research fellow at the Institute of South Asian Studies in the National University of Singapore. Views are personal