China and India’s demographics: getting in the way of growth

By Rahul Jacob - FT

Indian Prime Minister Manmohan Singh is chairing a meeting today to discuss India’s “New Manufacturing Policy”.  The meeting is well-timed. With labour shortages across southern China, Western companies are moving clothing and shoes manufacturing to countries like Indonesia, Vietnam and Bangladesh – but India is rarely mentioned.

The reason for this has a lot to do with its demographics, which along with China’s were put under a spotlight last month when both Asian giants released the results of their 2010 censuses.

Crunching the demographic numbers suggest China and India’s much trumpeted future economic domination of the world might not come to pass. To understand why China’s factories in the south and elsewhere in the country complain of a labour shortage, one need only look at the way the proportion of its population between the age of 0-14 has been plummeting, from 27.7 percent in 1990 to 16.6 per cent in 2010.

Credit Suisse analysts Amlan Roy, Sonali Punhani and Liyan Shi in their report, “Getting Counted in the Demographic Giants” point out that the growth in China’s population has slowed from 1.57 per cent a year between 1990 to 2000 to 0.57 per cent during the last decade. This means that the United States’ population (which grew by 9.7 per cent over the whole decade) is growing faster than China’s, which grew by just 5.8 per cent between 2000 and 2010.

For full article:

http://blogs.ft.com/beyond-brics/2011/06/09/china-and-indias-demographics-getting-in-the-way-of-growth/