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India overtaking China? Not so fast | beyondbrics | News and ...

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India overtaking China? Not so fast

April 28, 2011 3:35 pm by Akanksha Awal

As census results from the worlds two most populous countries pour in, the China India demographic transition debate rages on. The rate of population growth in China has slowed to less than 6 per cent over the past decade, while in India it surged ahead by almost 18 per cent. Indias population is on track to become the biggest in the world by 2030. But will India be able to transform its demographic transition into long-term sustainable economic growth? China was home to 1.34bn people in 2010, the latest census shows. The figure is lower than analyst forecasts of 1.4bn, and the rate of population growth, at 5.8 per cent over the past decade, is little more than half the 11.7 per cent growth in the decade to 2000. By contrast, Indias provisional census results, released in early April, suggest the countrys population grew by 17.6 per cent over the past decade to 1.2bn. Even though the rate of population growth in India also declined, from 21.5 per cent in the decade to 2000, Indias population should overtake Chinas during the next two decades. Many economics predict a promising future for India as it reaps the benefits of the demographic dividend a major component of its recent success. Indias population is younger than Chinas. The country will add 26 per cent to the worlds total working population over the next ten years. These young workers will drive the economy, adding to the savings rate and fuelling investment. In contrast, Chinas population will reach an inflection point during the next decade. The share of elderly people in its population will grow more quickly than that of young workers, adding to strains on labour costs and producing a decline in household savings. China, the argument goes, has already reaped the benefits of a large working-age population and within the next two decades will be weighed down by the burden of an ageing population, much like the advanced economies of today. Chinas dependency ratio (the number of working-age people supporting children and the elderly) declined 2.9 per cent in the five years from 2005 to 2010, while Indias dependency ratio in 2010 declined 7.7 per cent almost double that of China according to calculations by the Population Foundation of India based on 14/09/2011 12:18 UN data. The UN expects Indias age dependency ratio to go on improving, from 55.6 per

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