Why India isn’t the ‘Next China’: A look at Beijing's demographic challenges

Beijing, Jan 18: China witnessed a population decline for the first time in decades last year, official data showed on Tuesday, as the world's most populous nation faces a looming demographic crisis.

The National Bureau of Statistics in China reported a drop of 850,000 in population at the end of 2022 and it marked the beginning of what is expected to be a long period of population decline, despite all government efforts to reverse the trend. The NBS announcement comes at a time when China's economic growth fell to its second-lowest in five decades, registering a paltry three per cent increase in 2022.

According to a recent report by the World Population Prospects 2022 by the United Nations Department of Economic and Social Affairs, Population Division, India is projected to surpass China as the world's most populous country in 2023. According to the report, India is projected to have a population of 1.668 billion in 2050, more than China's 1.317 billion by the middle of this century.

However, comparing China's situation with India which is set to become the world's most populous country by mid-April, and experts suggesting that the country must learn from the Beijing would be an overstatement to say.

China's demographic landscape has in recent times been thoroughly redrawn by unprecedented population changes. The bigger problem is that an aging population. As predicted by demographers, Chinese population is growing old and the proportion of people aged 60 years and above is 18.7 per cent of total population in 2020 against 13.3 per cent in 2010.

This comes as a result of China's stringent family planning rules. It introduced its one-child policy in the late 1970s in an effort to defuse the population bomb and so that the demographic dividend could be utilized. However, in 2021, China scrapped its childbirth policy. As per the revised policy, Chinese people can now have up to three children.

Stricter birth limits have created a rapidly ageing population and shrinking work force that is straining the country's economy, the experts said. The population control measures have led to a skewed sex ratio and a decline in the number of women of the reproductive age group, which will be hard to reverse, they said.

In contrast, for India, the main advantage is the younger population. According to report, around 62.5% of India's working age population is aged between 15 and 59 years. This is an attractive proposition for investments both locally as well as via FDI. According to CII and EY, India has the potential to attract Foreign Direct Investments (FDI) of USD 120-160 bn per year by 2025.

''Young working-age population adapt fast and can keep pace with the continuing dramatic and constant technological change," Vidya Mahambare, professor of economics at the Great Lakes Institute of Management in Chennai, told The National.

A report in Wharton magazine tells that while a massive working-age people gives India the chance to become the world's next growth titan, the country will have to work hard to translate its demographic windfall into much higher standards of living for average Indians. Economic productivity is the key.

What also makes China's demographic future a looming crisis is that, it will create its own economic demands. Liu Xiangdong, deputy director of the economic research department at the China Center for International Economic Exchanges based in Beijing said more workers will be needed to care for the elderly, while retirement communities and other infrastructure tailored to an older population will see greater demand.