A social media post in early March claiming that India had become the world’s most populous country created a storm in China. The post claimed India’s population had hit 1.415 billion and was widely shared on social media, adding to rocky relations between Beijing and New Delhi and concerns over domestic growth hurdles in China, while also fuelling discussions about a host of social issues. Demographic issues have been a hot topic in China since last year, when the once-a-decade census found the national fertility rate was alarmingly low. That census confirmed China’s population in 2020 was 1.412 billon, compared to 1.38 billion in India, according to the United Nations. Is a demographic turning point just around the corner for China? China’s overall population only increased by less than half a million last year to 1.4126 billion, the National Bureau of Statistics (NBS) confirmed in January, with the UN listing India’s population at 1.393 billion last year. India’s government, though, has not been able to complete its planned own once-a-decade census in 2021 due to the coronavirus and the 1.415 billion figure was widely criticised as it lacked official authority. Given its comparable population, land mass and development goals, India has been a target for comparison since the 1950s, and a UN report in 2019 said that it could overtake China in terms of population in around 2027. The two countries have been neck and neck in per capita gross domestic product (GDP) terms for more than three decades. India’s population is also younger than China’s, but if the quality of population is not addressed, the so-called demographic dividend may turn into a demographic nightmare Kanti Bajpai But Kanti Bajpai, a professor of Asian studies at Lee Kuan Yew School of Public Policy at the National University of Singapore, warned that India’s economy has fallen behind given its poor infrastructure, antiquated labour laws, complex investment and manufacturing rules and its resistance to export-led growth. “The crucial issue is: what is the quality of the population in terms of education, health and productivity?” said Bajpai. “India’s population is also younger than China’s, but if the quality of population is not addressed, the so-called demographic dividend may turn into a demographic nightmare.” In terms of gross domestic product (GDP), China and India are ranked as the world’s second and sixth largest respectively. However, China’s GDP in 2020 was 5.59 times larger than India’s, having been 2.53 times larger in 2000 and 1.21 times larger in 1990, according to the Post’s calculations. According to the 2021 Asia Power Index released by the Sydney-based Lowy Institute, China was viewed as a superpower which has strong influence in Asia, with an overall score of 74.6 out of 100. India was placed fourth in the region and was categorised as a middle power with an overall score of 37.7. China has already reached three quarters of the size of the US economy, and will become the world’s largest in around 2030, according to former World Bank vice-president Justin Lin Yifu. ‘China will surpass the US by 2030’ as No 1 economy despite Ukraine crisis Suan Teck Kin, head of research at UOB Group, said China’s organisation helps it mobilise a variety of resources to achieve its development targets. China has utilised its abundance of cheap labour, and successfully turned itself into the world’s workshop with deep integration into the global supply chain, while it has also accumulated huge advantages over India with a labour-intensive manufacturing economy that is 10 times larger, he added. “If you look at India, it doesn’t have a similar system,” said Suan. “The size of the population is important, but the more important thing is what to do with it.” Automation and better quality of life can also reduce the demographic impact on the economic system, Suan added. Manoj Pradhan, founder of London-based research firm Talking Heads Macro, said the gap was partly owing to their different capital accumulation performance. “India’s case is very simple – it has not been able to accumulate capital, and governments have simply not done enough to deregulate,” said the co-author of the Great Demographic Reversal: Ageing Societies, Waning Inequality and An Inflation Revival. “It will still not be as linear as it was for China because India’s growth model is a disaggregated one driven by private businesses, but it seems to be on the right track for sustained improvement.” The benefits of that accumulated capital are still serving China very well. However, with a high level of debt, the ability to further accumulate capital is limited, while population growth is slowing Manoj Pradhan India reported a higher growth of 9.2 per cent last year, but the economic gap is widening because China’s annual incremental amount was larger. “The benefits of that accumulated capital are still serving China very well. However, with a high level of debt, the ability to further accumulate capital is limited, while population growth is slowing,” Pradhan added. China’s demographic challenges were one of key topics discussed during the “two sessions” earlier this month as officials met in Beijing to discuss solutions to short- and long-term economic challenges during the tone-setting meetings. The comparison with India highlighted the need to focus on solving domestic problems, including an ageing population, health care issues and a pension crisis. China’s population crisis could give women greater reproductive rights Du Yang, a labour economist with the Chinese Academy of Social Sciences, wrote in February that China will “very soon” see a peak of population, and the authorities must make a full assessment of its social and economic impact and make active preparation for policy countermeasures. He specifically warned that the population decline will place long-term restrictions on consumption, while also having an indirect impact on infrastructure investment. “It is also necessary to improve the quality of opening-up to maximise the growth of external demand, so that the negative impact of a declining population can be offset as much as possible,” he said. Li Daokui, a Tsinghua University professor, said one of China’s development opportunities lies in human resources, which refers not only to the number of laborers, but also their education, skill and health. The continued rise of a healthy and skilled population can largely compensate for the slowdown in overall population growth Li Daokui “The continued rise of a healthy and skilled population can largely compensate for the slowdown in overall population growth,” he said during the two sessions, while calling for reforms on birth, lifelong education and flexible retirement. The growth disparity also weighs over China-India relations, which remain tense amid ongoing border rows. “The strategic significance of the power gap is that China does not feel it needs to accommodate Indian preferences; and India does not feel it can make concessions without looking like it is surrendering,” added Bajpai from the National University of Singapore. “The gap suggests a continuing stalemate on key conflicts, with neither side willing to compromise.”