January 30, 2023

Opinion: India is on the cusp of replacing China in so many ways

5 min read

Editor’s note: David A. Endelmana CNN contributor, two-time winner of the Deadline Club Award, a Chevalier of the French Legion of Honor,” author ofA Red Line in the Sand: Diplomacy, Strategy, and the History of Wars That Might Still HappenAnd on blogs Andalman Unleashed. He was previously a correspondent for The New York Times and CBS News in Europe and Asia. The views expressed in this commentary are his own. See More feedback on CNN


Asia is heading for a tectonic power shift headlined by rapid demographic changes. The West, especially the United States, should be better prepared.

A dramatic demographic shift is underway after China’s population declines in 2022 for the first time in six decades. Meanwhile, India, with its ever-growing population, is likely to cross. According to United Nations estimates, China is the most populous country in the world as of April.

David A. Endelman

The latest statistics show that China is rapidly coming to grips with this. One Child PolicyThat officially ended in 2016 after more than three decades. The policy introduced several challenges; Perhaps the most important 4-2-1 ProblemWhere a working person, being an only child, has to support four grandparents and two parents – a huge strain on the working population. It also puts pressure on China’s government-backed pension system.

The crisis is the result of a policy designed by the Communist Party to reduce population growth and announced in an open letter on 25 September 1980 that no family would be allowed to have more than one child. Policy Also led by The preference for sons led to the abortion, abandonment, and even infanticide of female fetuses, and the male-female ratio eventually became skewed.

Within a decade, the fertility rate had fallen below 2.1. – Zero population growth retention rate.

By 2016, families were officially allowed to have two children, then three by 2021, and No penalty was imposed on families regardless of their size. By then, however, it was too late to reverse the disastrous demographic trend.

Last year, China’s National Bureau of Statistics Reported That new births fell for the sixth year in a row to 9.56 million, while deaths nationwide hit 10.6 million. The new birth also means fewer consumers, an ultimately shrinking workforce, a younger next generation and fewer working Chinese to support their children and retired family members. It is a spiral that cannot be reversed.

At the same time, the Covid-19 pandemic and the government’s strict zero-Covid policies Also increased Marriage rate drops China’s official statistical yearbook 2022 showed that the number of marriages in China fell to a record low in 2021. At 7.6 million people.

Hidden in these figures are some troubling facts for China and the global economy.

A shrinking Chinese population means less domestic consumption, which is likely to severely affect companies trying to do business in what will necessarily be a shrinking Chinese domestic market. consumer brands such as Starbucks, Nike and Under Armor and tech and auto companies such as Apple, Intel, Tesla, General Motors and Ford Produce enough. of their global revenue from Chinese consumers. Tesla makes half of its electric cars in China. As of 2019, Apple had about half of its assembly lines in China, although the number They started to fall Substantially in subsequent years, reaching 36 percent last year.

These production figures point to an even more dramatic problem for China as its demographic spiral also means a rapidly shrinking pool of cheap, skilled labor. Western companies Already watching? Elsewhere, though China’s manufacturing Can be difficult Replicating on the same scale in the near term.

India, whose population is likely to overtake China, is the logical alternative. While China will continue to shrink, India Will continue to growThat number is likely to reach 1.7 billion in 2064, up from 1.42 billion today — about 50 percent more than China’s projected population at that time. In theory, it would be a go-to nation for cheaper and even more highly-skilled labor, especially for high-tech industries.

But there is a huge problem here. The bulk of well-educated tech workers are in India’s west and south, where the population grows. is the least severe.

Places like Uttar Pradesh in the north – with 200 million people – are places where the population is growing exponentially.

But manufacturing is lagging behind In Uttar Pradesh, which has 17% of India’s population but only 9% of its industrial employment. Moreover, many of India’s fastest-growing regions are barely accessible to modern commercial transportation, and the population is poorly educated. India is on a tear to redress these inequalities, but it will take some time.

People shop at a bazaar ahead of Diwali, the Hindu festival of lights, in Delhi's Old Quarter in October.

Prime Minister Narendra Modi The goal is to make India. A $5 trillion economy by next year, with Uttar Pradesh a $1 trillion economy in 2027. To accomplish these goals, it will need a lot of help, much of it from abroad.

Already, Apple has started shifting a chunk of its iPhone production from China to India. One in 4 iPhones Can be made in India by 2025. Walmart is. Looking for triples By 2027, its exports of Indian products will touch $10 billion. All of this would put Modi and his country in direct — and potentially toxic — competition with Xi Jinping and China.

The advantage of India replacing China is that the West would replace an oligarchical dictatorship with a more or less Western-style democracy as its primary economic partner.

Of course, this would quickly leave China behind the wall, defensive and hostile, which a democratic India with Western leanings would have to face. In December, the US Added 36 Chinese companies. After being blacklisted for trading in advanced technologies Strict rules On the sale of semiconductor technology to China.

The Biden administration is still making some efforts to heal open wounds with China — along with Treasury Secretary Janet Yellen. meeting with Chinese Vice Premier Liu He last week. Liu recently made a big announcement for more investment in China at the World Economic Forum in Davos, Switzerland. But it may be too little, too late.

And the leaders of China and India have little interest in improving relations anytime soon. At the Shanghai Cooperation Organization summit in Samarkand, Uzbekistan, in September, there was no bilateral meeting, no recorded public smiles or even handshakes between Xi and Modi, led by Former Chinese diplomat Xi Jiangtao did. Write in the South China Morning Post.The geopolitical divide between China and India could not be clearer. President Xi Jinping and Prime Minister Narendra Modi have not met or spoken since the military standoff in the disputed Himalayan border region began in May 2020. (Xi and Modi, however, Short conversation (at the G20 dinner in Bali in November).

As India prepares to displace China as the world’s most populous country, the US and the West may be forced to choose sides. This is a pressure that must be resisted as much as possible in the interests of political stability, not to mention economic pragmatism.

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