OAs India considers how to make the most of its demographic dividend, China has reported its first annual population decline since 1961. At the same time, the West is courting India for trade and security partnerships, and attempting to shift its supply chains away from China, in part to limit Chinese technological development. And while analysts predict that India will become the world’s third-largest economy by 2027, many are now questioning China’s ability to overtake the United States as the world’s largest within the next few decades.
In this Big Question, we ask Pranab Bardhan, Brahma Chellaney, Pinelopi Koujianou Goldberg, and Yi Fuxian whether the economic fortunes of India and China will continue to diverge, and what that could mean for the global economy.
PRANAB BARDHAN
I think the century will probably not belong to China or India – or any country, for that matter. Chinese achievements in the last few decades have been phenomenal, but it is now experiencing a palpable – and expected – slowdown. And while international financial media have been hyping the arrival of “India’s moment,” a cold look at the facts suggests that such assessments are premature at best.
A key reason for this is demographic. Yes, India has most likely already surpassed China as the world’s largest country by population, and its youth bulge is substantial. But far from delivering a “demographic dividend,” India’s relatively young population may turn out to be a liability, as the country struggles to generate sufficient productive employment.
India has found the most success in skill-intensive sectors – such as software, digital technology, and pharmaceuticals – which do not have much need for the low-skill workers who comprise a huge share of India’s working-age population. In fact, the share of unskilled labor-intensive industries in India’s merchandise exports declined by almost half over the last two decades. Massive numbers of Indians are now un- or under-employed, and many discouraged workers have dropped out of the labor force.
It does not help that Indians lag even on elementary health indicators: household survey data show that the proportion of children who are stunted or otherwise malnourished remains extremely high. Simply put, while India has a large quantity of people, the quality is lacking, with productivity levels insufficient to enable the country to compete internationally in many sectors.
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Iran's mullahs have made significant advances by tripling their nuclear program's capacity to enrich uranium to 60%, a short step away from the 90% purity required to build a nuclear weapon. (Image source: iStock)




