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China to retain advantage despite India's demographic rise

China to retain advantage despite India's demographic rise

implex ,  31-Dec-10
China would retain its economic advantage against India in the next two decades despite decline in population and the labour force, a top Chinese analyst has said. 

Playing down concerns that the future demographic shift would help India to over take China, M Wan Jun, a researcher said, "It is too early to say whether India will surpass China economically, as China is also gradually shifting its growth mode." 

Wan is from the Institute of Economics at the Chinese Academy of Social Sciences said. He was reacting to US Census Bureau forecast that structure of Asian economies would change as India is set to overtake China as the most populous country by 2025. 

"The so-called demographic dividend won't disappear right away, and may last for another two decades," he told Chinese state run Global Times playing down the theory that larger population would propel India to overtake China economically. 

Statistics from the China Population and Development Research Centre estimate the country's active workforce will decline to 990 million in 2025. This will make it still higher that India's 940 million, as predicted by the US Census Bureau, he said. 

The US Census Bureau forecast released this week said India will overtake China as the world's most populous country in 2025, influencing the structure of Asian economies. 

The latest Bureau estimates released this week, which are in line with previous studies, predict that India will reach 1.4 billion people in 2025, surpassing China, whose population growth is more modest. 

Since the 1973 introduction of the one china policy, China has stopped an additional population growth of 460 million, Ma Li, an expert at the China Population and Development Research Centre said. 

During the past two decades China posted stronger growth rates fired by its youth taking to manufacturing in a big way turning China into a factory of the world. 

But the China will not have that advantage as its labour force was set to shrink. That may not be the scenario as China is shifting from labour intensive industry to capital and technology based which included the automobile and petrochemical industries which has less demand for labour.

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