Japan Institute for National Fundamentals

　
The world’s largest democracy, India, recently become the world’s fifth-largest economy, after surpassing Britain. Now India is about to overtake China in population size. It will be for the first time in at least three centuries that China ceases to be the world’s most-populous nation.

India’s economy is smaller than China’s but is growing faster. Today, India is the world’s fastest-growing important economy, according to the World Bank. India is forecast to account for 12.9% of all global growth over the next five years, more than America’s share.

Youths propelling economic growth

China, by contrast, is running into long-term constraints, including a shrinking and rapidly aging population, slowing growth in productivity, and high debt level. China’s demographic crisis is deepening even as it remains a middle-income, developing country, as measured by workers’ average incomes.

China’s demographic crisis, which threatens its status as the world’s factory floor, could be compared to the one that stalled Japan’s economic boom in the 1990s. But with Chinese households living on much lower incomes on average than in Japan, China will find it hard to provide a safety net for its aging population.

Against this backdrop, Chinese President Xi Jinping seems to be in a hurry to achieve what he calls the “Chinese dream,” or China’s global preeminence. Believing that China has a narrow window of strategic opportunity to modify the international order in its favor, Xi has shown an increasing appetite for taking major risks.

India, however, does not need to hurry. With a median age of 28.4, India is one of the world’s youngest countries. India’s youthful population is propelling rapid economic growth, contributing to consumption boom, and driving innovation, as highlighted by the development of a world-class information economy.

India has about 600 million more people than Europe, which is divided into 44 countries. Despite its immense cultural and ethnic diversity, India is the first developing economy that, from the beginning, has strived to modernize and prosper through a democratic system. And, unlike China, India is not seen as hungry for the land and resources of others, with India’s rise not accompanied by greater assertiveness.

Reining in Chinese expansionism

Meanwhile, military reasons explain why China has sought to achieve its objectives by stealth, deception and surprise than by direct combat. Its expansionism in the South China Sea, for example, has happened without it firing a single shot. In contrast to India’s all-volunteer military, the Chinese People’s Liberation Army (PLA) largely relies on conscripts who ostensibly “volunteer” for two years of service after crossing the age of 18. Contrary to conventional wisdom, India – with the world’s most-experienced military in hybrid mountain warfare – has an edge over China in the high-altitude Himalayan environment, according to two American studies.

India’s incredible economic growth has made it a crucial pillar of the global economy. But for this century to belong to India, it must become a manufacturing powerhouse by taking advantage of its comparatively lower labor costs and Western companies’ efforts to slowly shift production away from China. India’s accelerated rise could help rein in Chinese expansionism.

Brahma Chellaney is a professor of strategic studies at Center for Policy Research, New Delhi.