8 reasons why India will overtake China and power world growth

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8 reasons why India will overtake China and power world growth

8 reasons why India will overtake China and power world growth

Chatting to Mr Adams, this week, he shared with me his insights into how he sees the global growth story changing with India, not China, becoming the new global growth engine.

India will displace China as the global growth engine, here’s why: Demography.

1. China’s ageing population will come at a cost, the cost of servicing its large group of soon to be elderly.

2. India’s population between the ages of 15 to 24 is the largest of that age bracket of any country in the world.

3. India has finally got its act together and can now, as a country make a big global difference due to the youthfulness of it’s population.

4. When I say ‘got its act together’, I mean politically India has voted in a change of government in May 2014. The new pro-business National Democratic Alliance, led by the Bharatiya Janata Party, won a strong victory allowing it to govern without the support of other parties. The last time India had a majority government (read: get changes through parliament without blockages) was 1984.

5. China’s one child policy in effect since 1979, still in effect, has given 117 males for every 100 females, by 2020 there will be 30 million more men than women. Due to the costs of living in China, the women now prefer to work over having kids. Consider too the “Four-two-one” problem, one adult child is left having to provide support for his or her two parents and four grandparents.

6. Rising cost of living in China have driven low-skilled manufacturing jobs to cheaper venues such as Vietnam, Bangladesh and Pakistan. The stereotypical roles between China and USA are reversing, there is an increasing trend in the USA of manufacturing goods consumed by China, and the Chinese trend and policy is to move towards more of a consumer economy.

7. Over the next 10 years, the 15 to 24 age cohort in China will not accept being told what to do politically, will take economic empowerment for granted, and will want to shape their own future, remember they were raised as the ‘only child’. The only question for China is, how tumultuous will things have to get before China liberates their political process.

8. The Reserve Bank of India is relatively independent of government influence. India has a vigorous and opinionated free press, with 82% of Indian households having phones, mostly mobile, and a quarter of Indian exports are ‘outsourced’, as US and EU companies outsource many back-office and even legal and medical services to India thanks to India’s English language skills.

Food for thought – John Howard, who was Australia’s prime minister from 1996-2007, put it succinctly as “China will grow old before she grows rich”.

Originally from the UK, Andrew has been a market professional for almost 19 years, trading a wide range of global markets and instruments. As a highly regarded industry speaker, he has spoken alongside Sir Richard Branson, Robert Kiyosaki, Anthony Robbins and Tony Blair, empowering many thousands of people, from all over the world, with the skills, techniques and ...
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