They are the world’s two most populous nations.
They are poised to be the world’s second and third largest economies.
They are the world’s biggest markets.
One has grown at around 10% for 30 years.
The other has grown around 6% for 20 years.
And as China, the one with an average growth rate of 10%, is slowing down, India is slated to become the fastest growing economy of the world.
And it is in process. India, that has grown at around 6% for past two decades, is expected to grow at 7.5% this year compared to China’s 6.8%, as the International Monetary Fund (IMF) reports.
According to a report by the Harvard University, the projections say India will grow annually at 7.9% for eight years till 2023 while the average annual growth rate for China for the same period is expected to be 4.6%.
India is poised to become the world’s youngest nation by 2020.
India has 65% of its population under 35 years of age – that corresponds to over 81 crores (810 million) of India’s population of 1.25 billion.
When its prime minister, Narendra Modi, who started his first official tour of China today, talks of a demographic dividend, he has reasons to say so.
India is poised to have the world’s largest middle class surpassing China by 2030. The criteria used by the BBC for this projection was an earning potential of US$ 10 to US$ 100 per day. The study projects India’s middle class to be 475 million strong by 2030.
According to a study by the World Bank, United States was at the top of the middle class consumption pecking order in 2009 with 21% global share (US$ 4377 billion). In 2020, China is projected to be at the top with 13% market share worth US$ 4468 billion. India will make a grand entry there with projected market share of 23% worth whopping US$ 12777 billion.
China’s is a manufacturing powerhouse and India is trying to be the one with the Bhartiya Janata Party (BJP) led government’s ‘Make In India’ campaign.
Global companies are vying for Chinese and Indian markets and India and China are eyeing for each other’s market as well.
And closer economic ties between the two giants, the projected second and the third largest economies of the world, the two largest middle classes, the two Asian superpowers and the two neighbours, make sense.
Right now, China is ahead of India in every comparable aspect – in social sphere, in military technology, in infrastructure and in economy – China’s economy is over four times the Indian economy.
But India is the world’s largest democracy and is slowly adopting the features of a free market economy while the Communist China with a one-party system did it very fast.
Now, China is stagnating and is coming around a sustainable growth rate.
And India is poised to take up – at least for a decade to come.
And the two counties together make the largest marketplace of the world – with 24% of the middle class consumption by 2020 that is slated to go up by 17% to become 41% by 2030.
India and China, the world’s two fastest growing economies, are home to over 2.6 billion people now – that is around 30% of the world.
And they are big markets for every country – including themselves.
Xi Jinping’s India visit last year and Narendra Modi’s China visit this year should be seen in this context only – two large economies that see gains in mutual cooperation – even if it means pushing back the contentious issues – including the border issue.
©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/