Population Growth and Economic Progression in China and India

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In the early years of the twenty-first century, the world's population had increased to about 7 billion; third-world countries housed 80 percent of this population, with Asian nations hosting the lion's share. Economic prosperity and population growth have, in particular, had a close relationship. Most economists have struggled to understand the positive and negative effects of population on the economy over time. Some analysts believe that population growth leads to economic prosperity, whereas others believe the opposite. In his population theory, Thomas Robert Malthus is regarded as one of the classical economists who contributed to this debate. Malthus acknowledged that the evolution of population would decrease the output per capita because population escalates at a geometrical proportion (that is the sequence of 2, 4, 6, 8, 10, 12…). Whereas production increases at an arithmetic frequency (1, 2, 3, 4, 5, 6...) and so the growth in productivity cannot counter the pace of population. Unlike Malthus, Robert Solow also focused on population progression rate at the expense of economic development. Solow pointed out that an upsurge in the population progress could reduce per capita income of workers and the average state productivity per worker. Consequently, a developing population can lead to impairment of employee output and advancements in the economy. Some optimistic economists such as Alhburg believed that a bigger population could result in advancements in technology and increase in demand, which implies that population growth can intensify the need for goods and enhance technological advancements. Therefore, a larger population has the capability of increasing the productivity of labor and average income per person and living conditions. To assert all these notions, this paper has to assess a practical situation of countries with a large population, how this population has contributed to the development and the socio-economic dynamics of these states.

Population and Economic Growth

There is no doubt that there is a relationship between economic performance and population progression. Currently, China and India are considered as the most populous countries on the planet. Classical economists have argued that high population is equivalent to having a bigger labor force; various economic issues have influenced how the Chinese and the Indian population have increased and the impact that this development has had on the economic evolution of these nations (Rodrik, 2014). This paper will focus on some of the critical differences in the growth rate of population in these two Asian countries, in what way it has influenced the economic expansion and direction of these respective countries. The research paper will not only look at the financial data but will also touch on political, social and cultural relations between: per capita income, education, government interventions, fertility rate, population control programs and technological advancements.

Growth in population can have various effects on the economy and the general living standards in a state. China has over 1.3 billion, and India hosts 1.3 billion citizens. These countries combined make more than two and half billion people while the planet has a population of almost seven and half billion. As much, they enjoy some shared factors such as a massive labor force, various economic factors within the Asian region. These economic factors have contributed to how these populations have grown and how they affect economic growth in their respective states (Cassen, 2016).

Malthusian Economics

Much of the original tenets of population study in relations to economic growth originate from the principles of Malthus. Malthus highlights two fundamental concepts. The first principle touches on certain factors of production like land that is constantly in static amount even if the population increases or decreases; this suggests a declining income for all other facets. The next principle is the progressive impact of the living standards on population growth rate. The Asian Development Bank carried an Economic Review in China and determined that the economic growth rate in China in 2012 ranged between seven to eight percent per year. This increased rate led to an unmatched growth in the living standards in China. In 2011, the CER reported a steady growth to approximately 6% annual growth in India (Dean, 2015). As much as these growth records have brought about an extraordinary development to these two countries, China and India have however fallen into the Malthusian population trap. The Malthusian population trap categorically states that when the size of the population is huge, the living standard would be low and this will call for a reduction in the population. According to Malthus, there are two ways in which a population could be reduced, and that is through preventive check (this is the intentional reduction of fertility) or through positive controls, (these are natural occurrences that reduce human population such as famine, malnutrition, and disease) (Ravallion, 2013).

Most countries with bulging population have resorted to using the preventive check to reduce population growth both in the short term and in the long-run. Several economic aspects are linked with fertility rates; they include advancements in technology and increased literacy rate. In the underdeveloped states, children are always viewed as a commercial advantage, a tool that can assist in increasing agricultural outputs (note: least developed countries rely on Agriculture as the backbone of the economy), and to guarantee that a caregiver will exist when the parents attain old age (Cassen, 2016). On the other hand, the necessity for more children is motivated by the improved standards of living and low infant mortality rates in the modernized states. Moving from farming and into the contemporary economy characterized by industrialization and improved service delivery sector contravenes the need to have more children in the developed countries. This is the reason why as much as developed countries enjoy better health services and low infant mortality; their population has remained low. Analyzing the employment paradigm in China versus India labor force, the Chinese economy looks more developed as compared to India. Applying the 2013 data, this indicated that forty-nine percent of the Chinese workforce was working in the primary sector as compared to twenty-six percent working in the secondary sector and twenty-nine percent working in the tertiary sector. In India, the agricultural industry employed sixty percent of the working population, while the secondary sector employed twelve percent and lastly the tertiary sector employed twenty-eight percent of the workforce. The viral existence of agriculture in India could explain the high number of employees in their primary sector, and why high rates of fertility is a popular trend in the population, owing to the need of children to assist the parents in handling farming services. Even though China and India have almost the same population, the technological advancements in China have allowed the Chinese government to efficiently control the growth of population, and growth of income the per capita of the country in the last decades. Without advancements in technology, it would be challenging to sustain an increasing population growth effectively (Ravallion, 2013).

Post Malthusian System

In this post-Malthusian System, the principles of Malthus link improved income to increased population on a sustained function, nonetheless the impacts of an increasing population on weakening resources within a country lowers the income per capita, however with the current technological advancements income has kept on rising (Cassen, 2016). Rodrik (2014) points out that because the Chinese transformed their economy from Agriculture to an Industrial and service centered economy, they will be capable of escalating their domestic income per capita. If the Indian policy makers could manage to replicate the same conditions and transitions in their economy, then their wages would rise, and as a result, fertility rates would decline, since the population would not be in need of more children to help in the agricultural sector. Due to the policies imposed by the Chinese government to control the population in China (for example the one child policy), the Chinese labor force would reach its optimum potential and then start to shrink. This will trickle to slowing down the Chinese economic growth. McMillan, Rodrik, and Verduzco-Gallo (2014), tenets that the type of economic development realized in China in the last decades are not viable due to the current dawdled fertility rate. The one child guiding principle imposed in 1978 by the Chinese policy makers has contributed towards low fertility rate. Before the implementation of the policy, the fertility rate of Chinese women was 5.75 that led to a high lagged productivity. Lushnikov and Kagan (2016) explain that the existing low fertility rate will ultimately lead to little-lagged fertility; this implies a constricted economic growth. If the present fertility rates were low, dawdled fertility would eventually reach lower intensities, which is a significant source of economic expansion, the particular prompt progression of the work force will diminish. Because India’s population progress has continued to escalate as compared to the Chinese one, the Indian work force might eventually outnumber the Chinese. This means that the labor wages in India would be lower, rendering it more appealing for industrialization. This finally acts a light at the end of the tunnel for India as it might encourage an evolution from agriculture to a service and manufacturing focused economy in the nearby future.

Relationship between Population, Education and Economic Growth

There is also an affirmative correspondence between education levels and gross domestic product. Both China and India’s economies are hurt by gender gap in education even more than the overall illiteracy levels. As various aspects of technological advancements can help in growing the average income, retaining a latter obligation to formal education for women could harness a similar impact. Rodrik (2014) adds that apart from the sub-Saharan Africa, the south Asian region also suffers from the problem of higher illiteracy levels among women as compared to men. East Asia, which includes such states as China, Singapore, Malaysia, and Thailand have the fastest growing economy and greater literacy levels among the third world nations. This fact can partially be ascribed to an equivalent enrollment in educational institutions between men and women. The gender difference regarding education is somewhat small, and females in eastern Asia constitute of a larger share of the labor force as compared to men than in any other third world region. This reveals the importance of gender equality in education when pursuing economic growth especially in the countries in Asia and the Sub-Saharan Africa (Galor, Oded, & David, 2000).

McMillan et al. (2014) point out that education directly affects fertility levels, the average income, and advancements in technology that underscores the interrelated environment of these social elements. Also, individual signals of economic expansion are consistently interconnected with low fertility rates; they include high literacy levels, elevated levels of urbanization, improved per capita income, high-energy consumption per capita, and low infant mortality rate. This acknowledgment of the complex correlation among these features emphasizes the need for any government strategy or action to be carried out in a multidimensional and multi-prolonged methodology. No single intercession can be anticipated to influence the fertility rate of a country towards a declining direction; the relationship between each of these variables and fertility among women is multifaceted, similar to the associations of the relations among these aspects and their conjoint impact on the rate of fertility. Greater levels of education among women lead to a large pool of skilled labor that will help in pushing more industrialized advancements. If the government in India invested comprehensively into the primary and secondary schooling as their Chinese counterparts, then they would realize a more rapid industrial transition and economic development. Lushnikov and Kagan (2016) posit that an increase in the levels of education transforms into an improvement in the average income, and this negatively correlates with the fertility rate. Any intervention carried towards increasing the revenues of the average citizen is expected to have a fertility-reduction effect and welfares; this also consists of increasing the accessibility to education and health services among these groups. This is to confirm that increasing literacy levels in women would directly translate to decreasing fertility rates.

According to Jiang and Luis (2015), higher levels of education among women can lead to late marriages, which consequently lead to reduced levels of fertility. Schooling is intended to be more than enrolling in primary, secondary and tertiary training or any other formal school system. Education also involves teaching women on family planning schemes, which will directly affect the fertility rates. The state can control the problem of population growth through strategic investment in family planning facilities and training. In fact, Jiang and Luis argue that it is the most significant investment for an unindustrialized state. On the works of Malthus, Dumont (2015), estimates the significance of constricted birth and the benefits on venturing in the process of family planning. Dumont (2015) used this estimates to associate the yield from classical development expenditure to restitution from expenses on family planning was 120 to 480 times more efficient than spending on any new ventures. A low fertility rate in a country does not only benefit women but also more education among women means more labor that is productive and has a direct effect on the economic development. Jiang and Villanueva (2015), posit that the greater levels of commercial and industrial development in Asian states contribute to the consequence of their comparatively elevated rates of schooling and the ever-increasing group of post primary educated personnel. The higher levels of education achieved by Chinese women as compared to the lower levels of women education in India might contribute to a substantial opportunity cost.

Effects of the One Child Policy in China

Galor, Oded, and David (2000) contend that the one child policy has had additional effects than the previously envisioned ones of dropping the fertility rate. In fact pooled together with an increasing average income due to spontaneous urbanization in the previous decade, this strategy has assisted in building a more educated workforce in future. Through various investments in the education sector among other aspects supplementary to bringing about better qualities of life, Chinese parents have ensured that the subsequent generations of the labor force would be extremely skillful in a progressively more industrialized economy. The introduction of the contemporary education system promotes the cost of child bearing and prevents children from engaging in industrious activities such as agriculture. Therefore, parents have the prospective to devote themselves to their children and substitute value for quantity. The intricacy and interrelations of all these aspects on the increase of population and economic expansion attract more devotion to the heavy duty fronting administrations in many emerging states. This task demands the respective government to make significant and sustainable policies, bylaws and detriments to guarantee that cooperation between the structures of the population and the growth and performance of the economy (Lawrence, 2014). China has gained more success as compared to other regimes because of the high partisan environment of the Chinese Communist Party in its governance. In comparison to the weak Indian administration, that faces a lot of resistance from its opposition when making significant policies and reforms in the commercial spheres. Dean (2015) writes that India had embarked on reforms that would control population growth in a different direction as compared to the Chinese way. The Indian government has had birth control policies since 1951, rendering India as one of the first states to take legal steps towards this direction. Nevertheless, the implementation of these programs has been very inconsistent, and the government has also taken laxity regarding monitoring these programs which resulted in widespread non-compliance. The Chinese policy on population control has been stated as a vital element in constricting the growth of population; other aspects have also added to the increased rate of Chinese development and enactment in spite of a bulging population (Galor, Oded, & David, 2000).

Discussion

The evident accomplishment of the Chinese Special Economic Zones has contributed to other unprecedented features. The centralization of the Chinese economy gives the administration the freedom to establish these Special Economic Zones in their preferred destinations. This further dictates the domestic migration and population patterns for the next decades. As an outcome, urbanization has been directed to few economically strategic positions. The disintegration of the Indian structure, ascribed to its liberal regimes has not favored such a complete synchronization and has therefore led to a sluggish urbanization and a reduced skilled labor force. More urban centers allow better Industrialization that would generate more employment rates. India can only achieve these goals when industries are dispersed in various cities. Higher rates of urbanization transcend to a better general labor market and a vast service sector interrelating with industrialization. Galor, Oded, and David (2000) argument emphasizes where China is regarding economic development and where India should aim to be, through more succinct and organized method to an industrial transitional. Lawrence (2014) also points out that a typical productivity intensifies proportionally with the labor market size as a standard comparison between the skills of the labor force and the employment requirement of corporations enhances with growth in the labor market’s scale. This is also a more realistic condition for China than for India.

The development scheme carried out the Chinese and Indian government varies a lot in achievements. The objective of the controversial policies intended to implement or monitor population growth is more attainable with the supervision of a rigid government unlike in developed democracies. While India is credited as the largest democracy in the world, the administration has been relaxed and impassive when tackling issues of population progression, which somehow need decisiveness and agility. Women empowerment could be the first step towards addressing the problem of population growth and its dire effects on the performance of the economy. As a result, women empowerment would lead to increase per capita income, thus encouraging a greater education investment in children, advancing urbanization as more skilled labor force pursues employment that would initiate technological advancements. As much as there is a lot of information, that could be documented on the impact of population progression on economic development, particularly in the emerging countries like China and India. This research paper has aimed at analyzing some basic factors of people and development in the economy and has tried to explain the causal link between domestic average income, education, fertility rate, technological advancements, and strategies for family planning including population regulation strategies using the Chinese example and the facets the administration can implement.

Conclusion and Recommendation

Both China and India are categorized as developing countries, meaning that they have prospects for a continued economic growth. Economic growth should be fast paced even in the face of various constraints facing the two nations. To conclude this discussion several experiences can be drawn from both countries.

Agricultural reforms; for any country to be considered as a developed country, it should be food sufficient. So far, both India and China have not attained food sufficiency, probably because of the high rate of population growth. The structure and conditions of the agricultural institutions determine the kind of reforms that should be implemented to increase productivity in a country at the initial stages of development. Both China and India have taken steps towards improving their agricultural sector to accelerate economic development. China has benefited more from these reforms by controlling income to small holders, while Indian has tried by providing incentives and the relevant technology needed to increase productivity, however, they been less effective. It would not be wise for India to copy Chinese reforms on their economy because they do not have the same outcome due to the difference in economies of scale of the two countries. Instead, India should shift its agricultural policies from targeting particular farmers to targeting the majority of farmers, be it small and large scale farmers.

Social Welfare: social welfare regarding providing education, technology, and good infrastructure is essential for a sustainable economic development. In China, economic development was first initiated by reforms in various institutions then later technological advancements. The slow growth in the Indian economy has been attributed to the fact that the government has neglected the public goods need for rural developing in a bulging population. To make matters worse, the agricultural sector in India has employed close to 60% of the total population. Meaning majority of Indians are farmers or are one way or the other affected by agriculture. In a bid to improve quality of life, the government came with policies that reduced food prices but did not subsidize farming inputs. This situation has left farmers in a perpetual state of poverty, yet they are the majority.

Wage and income disparities: nothing is worrying in a country like a bigger population divide by income disparities and unemployment. China has tried to solve the issue of unemployment through technological revolutions. India instead, the more the population grows, the wider the wage gap gets. This is mostly reflected by the growing gap in rural and urban income and regional disparity. As much as in the last decade, India has realized a decrease in the overall poverty index, in some cases, the noticeable wage gap has led to civil unrest. India is trying to address this problem by reducing taxes and approving funds for make-work schemes, but when it comes to reducing poverty rates, the long-term solution lies in developing non-agricultural employment opportunities.

Technological advancements; the above paragraph ended by stating that long term solution to poverty eradication lies in coming up with non-agricultural opportunities. Both countries have established research institution and the capability to develop new technologies. Although the spread of technology could be constrained by the protection of intellectual property rights, China has managed to overcome this problem by its dictatorial and socialist policies that render any technology, a product of the state, as much the owner could claim some benefits from it. India cannot replicate the same policies due to its democratic and capitalist systems.

References

Cassen, R. (2016). India: population, economy, society. London: The MacMillan Press Ltd.

Dean, M. (2015). The Malthus Effect: Population and the liberal government of life. Economy and Society, 44(1), 18-39.

Dumont, G. F. (2015). The Demography of India: Malthus confirmed or denied? Population & Avenir. Retrieved from http://www.cairn-int.info/load_pdf.php?ID_ARTICLE=E_POPAV_724_0003

Fullagar, K., Alison B., & Chaplin, J. E. (2016). The new worlds of Thomas Robert Malthus: Rereading the principle of population. Princeton, NJ: Princeton University Press.

Galor, O., and David N. W. (2000) Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond. American Economic Review, 90(4), 806-828.

Jiang, X., & Villanueva, L. (2015). Smith, Malthus and recent evidence in global population dynamics. Economics Policy Research. Retrieved from http://www.economicpolicyresearch.org/econ/2015/NSSR_WP_022015.pdf

Lawrence, R. J. (2014). Population Policies. In J. Barnet, D. Conway, L. Lebel, M. New, & K. Seto, Global Environmental Change (pp. 579-583). Amsterdam: Springer.

Lushnikov, A. A., & Kagan, A. I. (2016). A linear model of population dynamics. International Journal of Modern Physics B, 30(15), 1541008.

McMillan, M., Rodrik, D., & Verduzco-Gallo, Í. (2014). Globalization, structural change, and productivity growth, with an update on Africa. World Development, 63, 11-32.

Ravallion, M. (2013). How long will it take to lift one billion people out of poverty? The World Bank Research Observer, 28(2), 139-158.

Rodrik, D. (2014). The past, present, and future of economic growth. Challenge, 57(3), 5-39.

November 23, 2022
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