Hutong Cat | Population: A new front emerges in tense India-China ties

China is expected to be overtaken by India as the world's most populous country in 2023. What does this imply?

“China and India are important neighbours to each other, both are ancient civilisations, the largest developing countries, and emerging economies. China and India have a combined population of over 2.8 billion and account for one-third of humanity.”

The report expects India’s population to touch 1.429 billion latest by July 1, around 2.96 million more than the population of China. (Shutterstock)

It’s an often-parroted line from Chinese diplomats when they need to say something nice and fluffy about bilateral ties.

But there were no such niceties when the news agency AFP asked Chinese foreign ministry spokesperson Wang Wenbin on April 19 to comment on the United Nations Population Fund (UNFPA) report, which said India will overtake China as the world’s most populous in 2023.

It’s about “quality” and not just “size”, Wang snapped.

“Size matters, but what matters more is talent resource,” Wang went on instead of simply welcoming the fact that India will continue to contribute to the combined strength of “2.8 billion people” and “one-third of humanity” even if China falls behind, assuming Beijing believes its own fluff.

The report expects India’s population to touch 1.429 billion latest by July 1, around 2.96 million more than the population of China, making the South Asian country the most populous country in the world for the first time.

There are reasons for China to be snappy on the topic, and they include not just the potential and possibility of a young India leaving it behind economically in the future — okay, far ahead in the future — but the country’s own rapidly ageing population, its plummeting birth rates and that most women are just not willing to have more than one child.

Also, part of the impact: Decline in the workforce, and an increase in outlay for elderly care.

As China’s population ages, there will be an increase in demand for healthcare services, which will strain the healthcare system and lead to higher healthcare costs; the elderly population will also require increased expenses on pensions, social welfare, and elderly care, which may also weigh heavily on the government's budget.

Consumer spending is expected to fall: With fewer working-age individuals, there may be a decrease in consumer spending, which could negatively impact the economy.

In 2022, at 1.2 births per woman, China had one of the world’s lowest fertility rates; India’s fertility rate, at 2.0 births per woman, was just below the “replacement” threshold of 2.1, the level required for population stabilisation in the long run.

According to the UN’s latest projections, released by the UN Department of Social and Economic Affairs on April 24, India’s population is expected to reach its peak size around 2064 and then decline gradually.

“In April 2023, India’s population is expected to reach 1,425,775,850 people, matching and then surpassing the population of mainland China,” the UNDESA policy brief (No.153) said.

Beijing announced in May 2021 that it would allow each couple to have three children after the new Census revealed that women gave birth to just 12 million babies in 2020, down from 14.65 million in 2019. China’s fertility rate was 1.3 children per woman in 2020, below the replacement level of 2.1 needed for a stable population, data showed.

The loosening of China’s family planning policy hasn’t worked according to expectations.

The Chinese government had been well aware of the pitfalls of its one-child policy for decades but continued with it before dismantling it in stages in the last decade.

The damage, however, had been done.

In March 2021, the People’s Bank of China (PBC), the central bank, warned of the country’s fading demographic dividend.

“The gap between China and India has narrowed. As the two giants in Asia, China’s economic growth has been faster than that of India. However, in recent years, with the emergence of India’s late-comer advantage and the fading of China’s demographic dividend, India is on the verge of outpacing China in economic growth,” PBC researchers wrote as part of the central bank’s working paper series.

“More importantly, China’s ageing problem and sub-replacement fertility (fertility rate that’s below the replacement rate causing the population of a certain group to decrease over time) are severer after a decade, while India’s demographic structure will be further optimised in the next three decades,” the PBC report said.

Make no mistake: China is still well-positioned to face the complications of a population decline.

“China benefits from a skilled labour force, capital accumulation, technological progress, and productivity growth, and is well equipped to face its demographic future,” Michael Herrmann Adviser, Economics and Demography, UNFPA, said in an email.

What matters is productivity, Hermann said, adding: “This depends not only on skills and talents of people (human capital) but also on technological capabilities (physical capital. Both must come together.”

There’s, however, a flipside to advancing education and technological capabilities in the context of population productivity, pointed out by Yi Fuxian, a demographer at the University of Wisconsin-Madison.

“As Japan’s experience shows, attempting to make up for a shrinking workforce by improving education can backfire. As Japan’s enrollment rate for tertiary education has soared – more than doubling since 1992 – the number of young people willing to work in manufacturing has declined,” Yi recently wrote for Project Syndicate, an analytical piece on China’s population problem, which he shared with HT.

“For China, overemphasising higher education could cause massive infrastructure projects like the Belt and Road Initiative to become a drain on a weakened manufacturing base. It could also compound China’s demographic woes by reducing fertility,” Yi added.

It is of course most important for countries with large populations to educate and employ their youth, pointed out UN’s Hermann.

Here lies a lesson for India.

“A relatively high population growth rate and a large number of young persons first and foremost implies a great responsibility for countries to educate and empower young people,” Hermann said.

“By 2050, this advantage (of a younger population) will continue to grow (for India). Not only will India have a much narrower elderly population at the top and a much wider workforce in the middle, but it will also have a wider workforce at the bottom, indicating a more abundant workforce and greater growth potential beyond 2050,” the PBC report had pointed out two years ago.

But India must be well-placed to reap the advantage.

The youth must be equipped with the “knowledge and skills” to engage in the economy on the supply-side, Hermann said, adding that the country must also make sure that the economies create sufficient numbers of productive and remunerative jobs for the youth or the demand-side.

As recently as on March 16 this year, Chargé d’Affaires of the Chinese Embassy in India Ma Jia published an article entitled “China, India and the promise of the power of two” in The Hindu newspaper.

An expected line in the article: “As two neighbouring and ancient civilisations, with a combined population of 2.8 billion, China and India are representatives of developing countries and emerging economies.”

Maybe, given China’s blunt response to the changing demographics of the two countries, it’s the last time we read that line.

Sutirtho Patranobis, HT’s experienced China hand, writes a weekly column from Beijing, exclusively for HT Premium readers. He was previously posted in Colombo, Sri Lanka, where he covered the final phase of the civil war and its aftermath, and was based in Delhi for several years before that

The views expressed are personal