INDIA AND CHINA’S ECONOMIES – A CRITICAL ANALYSIS

Napoleon Bonaparte the famous French military and political leader said “The word impossible is found in the dictionary of fools”. This means, everything is possible with the dedicated hard work and well plan. China proved this. In 1978, China was one of the poorest countries in the world, poorer than almost all African and Latin American countries. Today, it’s an $18 trillion economy, larger than the entire European Union (EU) and ready to surpass the U.S. within a few years. As of 2024, China and India are the 2nd and 5th largest emerging economies in the world respectively. On a PPP basis, China is at 1st, and India is at 3rd place. Among Asian countries, China and India together contribute more than half of Asia's GDP and account for about 35.31 % of total world population and 60% of Asia population. China and India, the world's most populous nations, have much in common: India home to about 1.44 billion people and China home to 1.43 billion in 2024. India is over three times denser than the China, as India's population density is 485 people per square km compared to 149 of China. Each has sustained an annual gross domestic product (GDP) growth rate over the past decade that is among the world's highest — 9 percent for China and 7 percent for India; and each has been among the world's most successful in weathering the storm of the recent global recession. In 1988, the GDP (Nominal) of both countries was almost equal. In 2024, China's GDP is around 5 times higher than India. On a PPP basis, the GDP of China is 2.51 times more than India. China crossed the $1 trillion mark in 1998, while India crossed nine years later in 2007 on an exchange rate basis. Both countries have been neck-to-neck in GDP per capita terms till 1991. The per capita rank of China and India is 75th and 143th, respectively, in nominal. The per capita rank of China and India is 77th and 131th, respectively, in PPP. China attains a maximum GDP growth rate of 19.30% in 1970 and a minimum of -27.27% in 1961. India reached an all-time high of 9.63% in 1988 and a record low of -5.83% in 2020. India got independence on 15th August, 1947, while China got independence on 1st October, 1949. India joined WTO on 1st January, 1995, while China joined WTO on 11th December, 2001. Despite, how China outpaced India in the development process so rapidly is to critically analyze is the main of my Paper. My Paper is purely based on facts and figures and I don’t have any prejudice and political intention in writing this Paper. *Professor (Associate) & HOD of Economics (Retired), KGC (NAAC “A” Grade College), Ex – Member of Board Studies (Economics), Kakatiya University, Warangal (India). Analysis of India and China’s Economies: • India’s economy and demographics resemble China’s between the late 1990s and early 2000s, indicating there could be two more decades of rapid sustained growth ahead as well as an enormous associated rise in energy use. • Real gross domestic product per capita at purchasing power parity had risen to $7,100 in 2022, a rate China first reached in 2007/08. • Median population age has increased but is still low at 27.9 years, which China reached in 1998. • India’s population growth averaged 1.1% per year over the 10 years from 2012 to 2022, similar to China’s over the ten years from 1988 to 1998. • The share of the population living in urban areas is estimated to have reached 35% in 2022, a level reached in China around 2000. • India’s energy consumption reached 26 gigajoules per person in 2022, a rate China reached in the early 1990s. • India’s total oil consumption climbed to 237 million metric tons in 2022, which China first reached in 2001. • Severe air pollution in Delhi and other major urban areas resembles China’s northern cities in the 1990s and 2000s, when pollution was estimated to cut life expectancy by up to five years. • There are important differences between the two economies, including climate (China’s cities are at much higher latitudes so more energy is needed for heating) and relations between state-owned firms and the private sector. • But, there are also important similarities, including a large rural population ready to migrate to urban areas in pursuit of better paid work and a large potential to industrialise by catching up with more advanced economies. • India is entering the central take-off portion of the S-curve when urbanisation, industrialisation, household incomes and energy consumption increase most rapidly, usually for several decades at a time. • Real incomes are still less than half the level in China and a sixth of the average for the advanced economies in the Organization for Economic Cooperation and Development (OECD), so there is enormous catch-up potential. • For structural reasons, India is likely to remain the world’s fastest-growing economy throughout much of the next 10-20 years, provided it can avoid major policy errors or other negative shocks. The combination of fast-growth in an already very large economy ensures it will be one of the largest if not the largest contributors to global growth throughout the 2020s and 2030s. • If India follows the same trajectory as every large country before it, urbanisation, industrialisation and rapidly increasing incomes, especially in the middle class, will drive an enormous increase in demand for energy services. • India’s expanding middle class will demand much more power for air-conditioning, lighting and appliances as well as more liquid fuels and/or electricity for domestic and foreign travel. • India’s primary energy consumption per person is less than a quarter of China’s and one-sixth of the average in the OECD economies, again implying an enormous potential to increase as the gap narrows. • With the United States, China and the European Union, India is one of the four key building blocks for any projection about energy consumption, fossil fuel use, and emissions at global scale through mid-century. • No two countries ever follow exactly the same trajectory of economic development and energy consumption; India will follow its own path and have to deal with its own specific challenges. • But, China’s rapid, sustained and massive growth over the 2000s and 2010s, with its roots in the reform and opening of the 1980s and 1990s, provides an indication of the direction and scale of the changes to come. • While the rest of the world (including India) is assessing whether higher interest rates for longer is the new norm, China has cut rates, and the economy has entered deflation territory. The debt crisis has deepened with the default by the second largest property developer in China, Country Garden. China will no longer be publishing unemployment rates for those in the age group 16-24. • In India GDP growth rate was top 7 percent (per capita 6.2 percent) in 2023, and unemployment rates are at a 12-year low of 4.1 percent. • Geopolitics has turned attention away from China—and towards India. Economics is responsible for this change, not geopolitics. In 2019, Indian PPP per capita incomes were 47.5 percent of China’s. Convergence in per capita income levels for India-China is very possible (and latest) by 2044. This means that per-capita growth rates in India should be higher than China on a sustained basis. This had already started to happen in the previous decade. Between 2010 and 2019, per capita GDP growth in India was higher than China: 5.2 percent versus 4.5 percent. This marked the first decade after the 1960s when India grew faster than China. Annual GDP Growth Rates in India and China: When considering China and India, in recent decades China has been the more attractive economic prospect. The country’s nominal GDP of USD 18 trillion is roughly six times that of India. China has historically had a larger population, and in the previous decade, China’s real GDP growth outpaced India’s by over 1.5 percentage points annually. Analysis: According to IMF data, China’s population is now in decline. By the end of our forecast horizon in 2027, China will have lost 8 million people; In contrast, India will have gained over 75 million and beating China as the world’s most populous country. Moreover, India’s real GDP growth will be over 2 percentage points higher than China’s every year over our forecast horizon. More favourable demographics are one important factor to India, while China’s population will shrink and age, India’s is relatively youthful and growing briskly. Moreover, India’s far lower income per capita means there is more potential for catch-up growth than in middle-income China. China’s increasingly hegemonic state-owned firms will likely dampen the dynamism of the private sector in the coming years. Finally, China’s growing international isolation—as a result of U.S sanctions, frictions with the West and border restrictions—is already leading firms to diversify supply chains away from the country, a trend which is likely to continue ahead. India is set to pick up some manufacturing business that moves away from China; for example, Apple recently began production of the iPhone 14 from India. But, one must be cautious about India’s dilapidated infrastructure, red tapism and poor educational standards mean it is unlikely to usurp China as the world’s factory any time soon. That is to say, at-least partial economic convergence between the two powers is on the cards in the coming years. Secrets of China's Economic Growth: Many people are profoundly pessimistic about the Chinese economy’s growth prospects, owing to the emergence of massive debt, excessive investment, overcapacity, and so-called “ghost cities” since the 2008 global financial crisis. But these problems are not new. They have, in various forms, affected China’s economy since 1978, and were evident in East Asia’s other high-performing economies – Taiwan, South Korea, and even Japan – during their periods of rapid growth. China’s growth over the last 40 years has been nothing but miraculous. In 1978, China was one of the poorest countries in the world, poorer than almost all African and Latin American countries. Today it’s an $18 trillion economy, larger than the entire European Union (EU) and ready to surpass the U.S. within a few years. Since, Deng Xiaoping initiated his program of “reform and opening up,” China has recorded 9.7% average annual growth. In 2024 — depending on the value of yuan — China will officially escape the middle-income trap and stop being a “developing” or a “third-world” country. The threshold for joining the club of high-income country this year is $13,250 of GDP-per-capita; which China will exceed in a year or two. Moreover, in the four Tier 1 cities — Beijing, Shenzhen, Shanghai, and Guangzhou — that have a combined population of 80 million, the GDP-per-capita is $28,000, putting them on par with European countries like Spain. By the way, if we go to big cities in China, certainly one cannot believe it’s a “developing” country. One can amaze to see the skyscrapers, bullet trains, luxury malls, fancy cars like BMWs and Porsches everywhere world-class subway stations and trains, clean and safe cities, classy hotels. Most people have their favourite couple of talking points — cheap labour, communist dictatorship, copying, protectionism etc. There is some truth to all the cliches and stereotypes, but the truth is more holistic. China’s share of global manufacturing has grown steadily; yet the manufacturing wages in China have also risen constantly and are now much higher than other developing countries — for example, almost 4x higher than India. Moreover, in the four Tier 1 cities — Beijing, Shenzhen, Shanghai, and Guangzhou — that have a combined population of 80 million, the GDP-per-capita is $28,000, putting them on par with European countries like Spain. The following are some reasons how China became an economic superpower. Investment, Exports and Saving: Foreign companies invest in domestic manufacturing and then accumulate foreign exchange reserves through exports. In China’s case, the investments flowed from numerous places — Japan, South Korea, Taiwan, Singapore, Europe, USA etc. China’s ability to attract FDI has been remarkably steady over the last three decades. Thus, even though China stopped being a low-wage country and has been facing trade wars, it is still the ranked 2nd country in the world, in terms of attracting FDI. In the last decade, China received staggering $1.4 trillion of FDI. The Chinese are also prolific savers, which also means that Chinese banks have huge capital, which they leverage to invest in infrastructure and other forms of investments to boost growth. Mercantilism and Protectionism: China has been practicing mercantilism for centuries. It’s a smart strategy that the US embraced in the 19th century. It means focusing on “selling” more than buying and exports more than imports. By the way, Germany also practices this strategy — German exports equal 40% of their GDP. China also engages in protectionism, shielding domestic companies from foreign competition. Foreign companies are often told that if they want to sell something in China, they should establish factories in China and manufacture the products locally. However, China made it worthwhile for these companies to agree to these deals. How did these economies manage to grow so fast for so long and overcome the serious problems that they faced along the way? The answer is simple: resilience. Economic development is extremely complex process, full of challenges and risks, successes and failures, external shocks and internal volatility. And adverse effects – such as a rising debt-to-GDP ratio and excess capacity – are inevitable. If a country fails to respond adequately to new challenges as they arise, economic growth and development stall. Many countries in Latin America and South Asia, for example, have become mired in the so-called “middle-income trap,” because they failed to adjust their growth models in a timely manner. But, China managed this very successfully. In this sense, East Asia’s economies mainly China, Japan and South Korea have embraced the process of “creative destruction” described by the Austrian economist Joseph Schumpeter, whereby the economic structure is continually revolutionized from within. Moreover, by implementing incremental reforms that facilitate – and even encourage – the replacement of old, inefficient sources of growth with new, more dynamic ones, they have expedited this process. For example, China’s productivity-enhancing agricultural reforms in the 1980s were spurred partly by growth in the non-agricultural sector, a result of policies aimed at stimulating township and village enterprises. Similarly, in the 1990s, China addressed the build-up of bad debt and unfinished construction projects – the result of state-owned enterprises’ chronic loss-making and excessive property investment, respectively – by implementing institutional reforms that stimulated growth in more dynamic sectors, thereby offsetting the SOEs’ (State Owned Enterprises) declining return on capital. Resilience has thus characterized the interaction between the government and markets since the introduction of Deng’s reforms. Indeed, according to the late economist Gustav Ranis, the interactive dynamic of policy and market institutions was the key to the success of the East Asian economies. For example, fiscal decentralization in China, spurred by local institutions’ demands for increased autonomy, has helped to fuel regional competition and sustain an increasingly market-oriented economic environment. This interactive dynamic is also reflected in the formation of industrial policies. In China, though clusters of vibrant smaller manufacturers are flourishing, policymakers have done relatively little to promote industrial development and upgrading. This leaves it up to market institutions to guide the process, ensuring that they play a key role in the expanding industrial sectors. Another source of resilience in East Asia are local governments. For starters, they are responsible for public capital expenditure, driving the improvement in China’s physical infrastructure and yielding reasonable returns for private investors. This advances the objective of helping local businesses, particularly innovative small and medium-size firms, to grow and thrive. To this end, local governments are also helping entrepreneurs gain access to global production chains. The Zhejiang and Guangdong provinces have been particularly successful in this effort – and, unsurprisingly, rank among China’s most robust regional economies. In China, local governments have demonstrated a willingness to support institutional innovation. This allowed for the flexibility needed to address structural challenges at the local level, thereby preventing them from blocking growth. Political System: Being a non – democratic country and ruled by Chinese Communist Party (CCP). Hence, there will be no frequent changes in the government policies as in a democratic country. This is a big advantage for foreign investors in the era of globalisation, which in turn helped for the rapid development of China. Advantages to India Over China: Defaults by Chinese borrowers have hit a record high post-pandemic, with 8.54 million individuals blacklisted from economic activities. This surge, up from 5.7 million in 2020, represents about 1% of China's working-age adults. Concurrently, China faces deflationary pressures, with consumer prices falling rapidly. The ongoing real estate crisis has dampened the consumer spirit, huge debt is weighing down the economy, foreign investors are losing confidence and unemployment and deflation are dogging the world's second-largest economy. Add to that President Xi Jinping's crackdown on private business. The World Bank predicts China's economic slowdown in 2024, marking a departure from its previous status as a global growth driver. Meanwhile, India, perceived as China's replacement, must focus on consistent growth through manufacturing and exports. The ongoing real estate crisis has dampened the consumer spirit, huge debt is weighing down the economy, foreign investors are losing confidence and unemployment and deflation are dogging the world's second-largest economy. Add to that President Xi Jinping's crackdown on private business. China's economic problems are short-term as well as structural. While China can come to grips with its short-term problems, the structural problems pose a big challenge. China's aging population which directly results in constricted labour supply as well as more welfare expenditure sticks out like a sore thumb. Its alienation from the US and the Western world at large threatens its huge export sector as the Western countries have started diversifying their supply chains. Though, India is still far away from achieving the economic miracle of China, the world now sees it as the replacement of China which has been driving the global growth for a long time while also being the factory of the world. Rating Agency S&P Global ratings forecast that India would become third largest economy by 2030. Though, China aims to transition to a high-technology economy instead of a mass producer of goods. Growth in the new-age tech industry requires innovation and a free private enterprise while Xi prefers a tighter control. A number of top business executives have 'vanished' recently. China's decline comes at a time when the world is confident on India. India has the chance to replace China but that would require consistent growth driven by manufacturing and exports. India's biggest advantage over China is its predominantly young population but low skills mar this potential. Skilling its youth, especially in new-age tech, will give India a major growth driver for decades. "A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one". Realizing the full potential of India's labour market will primarily hinge on the upskilling of workers and a rise in the engagement of women in the workforce. "Success in these two areas will enable India to realise its dimorphic dividend”. Overall FDI into India may have declined but there are reasons to be optimistic with the country seeing interest in greenfield investments (A green-field investment is a type of foreign direct investment (FDI) in which a parent company creates a subsidiary in a different country, building its operations from the ground up) amid the first-ever decline posted by China. India expects these to translate into higher investment flows by 2024. China is ‘risky’ for supply chains and India a favoured destination for U.S. firms, for example, Walmart, the world's biggest retailer, is importing more goods to the US from India and reducing its reliance on China as it looks to cut costs and diversify its supply chain. India is emerging to take China’s place or not, but India must strive hard itself to effect the big power shift in Asia. English Language Benefit: The 200 hundred years of British rule and the Indian obsession with the English language has proved to be a boon in disguise for the industry. English is the widest spoken language in India and all business transactions take place in English. In the Asian scenario, India is the most English-friendly language in the region. Whereas, China and other Asian countries like Thailand, Japan, and Korea stress their national language for all communication, making English a secondary language; India has a huge advantage in having a vast talent pool of fluent English-speaking young people. Education and Skill Set: With over 2500 Universities as compared to only 500 in China, India is far ahead in education and skilled manpower; giving its competitors a real tough challenge. Quality Edge: The Indian workforce is highly reliable and can deliver world-class quality while ensuring rapid delivery due to the international quality and security standards that are adhered to in the call center outsourcing services business. Governmental Support: The IT boom and the staggering revenue generation from this sector has made the Indian government very supportive of the needs of the industry. The government gives a special thrust on the development of this sector thus helping the businesses put their best foot forward in service providing. The government has given high-speed international private internet circuits to the big companies thus ensuring better delivery standards. It has granted Income tax and customs exemptions for the export of IT-enabled services and software. The government has enhanced its investment in IT infrastructure. It has given consent for private internet gateways The government has approved several key foreign investment proposals in the IT and IT-enabled services to allow for tremendous growth in this sector. Contrasting Demographic Paths: Two differences between China's and India's demographic paths bear most directly on each country's future prospects: trends in population growth and changes in population age distribution: (1). India's Population Is Growing More Rapidly Than China's: After 2025, India's total population is projected to surpass China, but it crossed China in this year only (India home to about 1.44 billion people and China home to 1.43 billion in 2024), thus became world's most populous nation. India’s population is expected continue to increase at least till 2050, whereas China's is expected to decline there after 2025 (Figure These contrasting growth rates are driven primarily by differences in fertility. China's fertility rate has been lower than India's for many years, in part because of China's One-Child Policy. In 2010, the total fertility rate (Average number of children that would be born to a woman, if she would experience the current fertility rate throughout her reproductive period) in India was estimated at 2.65 children per woman, compared with 1.54 in China. This difference means that, on average, each Indian woman is currently having, over the course of her lifetime, more than one more child than each Chinese woman is. Total fertility rates in India are expected to decrease very gradually to "replacement level" — the level needed for population stabilization in the long run (approximately 2.1 children per woman) — by 2035 (Figure 2). By contrast, the total fertility rate in China has been below replacement level since 1991. (2). China's Population is older than India's and is Beginning to Age Rapidly: The two countries' population-age distributions also differ substantially and are undergoing significant change. Because of China's declining fertility, the average age of its population is higher than India's. As shown in Figure 3, in 2010 China's largest age cohorts consisted of people aged 20–24, 35–39, and 40–44. By contrast, India's age structure more closely resembles the classic "pyramid" shape, in which the youngest cohort is the largest and each succeeding age cohort is slightly smaller than the next younger one. By 2035, China's population will skew heavily toward older age groups, whereas India's population will have its largest cohorts in the age groups below 50. Age-Sex Structure of the Populations of India and China, 2010 and 2035. Reflecting this changing age composition, the two countries will experience different patterns in the percentage of population that is of working age (customarily ages 15–64). In China, this percentage peaked in 2010, at 73 percent, and is beginning to decline; by 2035, it is expected to fall to 60 percent. By contrast, India's working-age population as a share of the total population is gradually increasing. From its 2010 level of 65 percent, the percentage of people of working age is expected to increase gradually; to crest at about 68 percent around 2030 — the same year that India will surpass China on this statistic; and then to decline slowly. Demographic Dividend for India: India has demography on its side, whereas China faces serious demographic demons, while a massive working-age population gives India the chance to become the world’s next growth titan, the country will have to work hard to translate its demographic windfall into much higher standards of living for average Indians. Economic productivity is the key. When a growing share of a country's population reaches working age, conditions may be ripe for that country to reap a "demographic dividend" — that is, to realize income growth and savings because a higher proportion of its population is able to contribute to the economy. From this standpoint, for the next several decades, China's demographics will not be more favourable for supporting economic growth than they are now. A high ratio of working-age people to dependents contributed significantly to China's economic growth in the past two decades, but China's proportion of working-age people is at its peak and will soon begin to decline. Moreover, China is now entering an era when its rapidly aging population — leading to rising ratios of dependents to workers and rising health costs for the growing cohort of elderly — could constrain economic growth. Savings rates may fall as a larger fraction of the population begins to use savings for retirement, thus reducing the flow of private capital into investments, while the government also diverts more of the budget from public investment to pension and health payments. In addition, the elderly in China (as well as in India) traditionally rely on family members to care for them in old age. If adult children divert more of their time and money toward taking care of their elderly parents rather joining the modern labour force, the forecasted rates of economic growth may not materialize. In India, by contrast, the demographic window of opportunity is still wide open. India will have an important demographic advantage — an increasing percentage of working-age people — that will produce favourable conditions for a demographic dividend until around 2030, when the ratio of working-age people to dependents is expected to peak. Suggestions: Whether China is able to sustain economic growth in the face of its demographic changes and whether India is able to reap its demographic dividend in the coming decades will depend on the socio-economic and policy environments in each country. The clearest prerequisite for translating demographic opportunity into sustained economic growth or sustaining growth will depend on labour to be productive. • Education. People need the skills and training to make them productive workers. China's population has higher average levels of literacy and education than India's. If India invests in human capital, it may be able to overcome its current educational disadvantage through productive employment of its growing pool of younger workers. Hence, Government of India should spend at least 4% of GDP (Presently spending 2.9% of GDP only). • Population health and the health care system: People also need good health and access to quality health care to work productively. China's population is generally healthier than India's, and China has the benefit of a more developed health care system. On the other hand, China's population is aging more rapidly than India's, and therefore health care costs for this population are likely to pose a growing burden. Currently, China is spending 5% of its GDP on health care, while India is spending 2.5 of its GDP on health care system. Hence, India must increase its expenditure on health care system to 5% of its GDP on par with China. • Middle and Small Enterprises: Start-ups are responsible for public capital expenditure, driving the improvement in China’s physical infrastructure and yielding reasonable returns for private investors. Hence, the Government of India must expedite the process of Start-ups in the entire country for rapid industrial development which in turn can promote massive employment generation. • Women in the workforce. Although a larger proportion of India’s population is of working age, those between the ages of 15 and 64 only make up 51% of the country’s labour force, compared to 76% in China. Inclusion of the untapped women in the labour market can dramatically expand the labour force in India and create a rapid expansion of the GDP growth rate. Hence, Government of India should create several opportunities for the untapped women labour force. • Infrastructure. A well-developed infrastructure can reduce transaction costs, enable economic efficiency, increase the productivity of labour, and ease the limitations of societal aging by extending productivity into later years. Building such infrastructure can also provide employment opportunities. As a result of recent, systematic investments, China ranks considerably ahead of India on many dimensions of infrastructure, especially those related to communications and energy. Hence, Indian Government must focus on creating well developed infrastructure for the development of the country and to attract foreign investments. • Openness to Foreign Trade and a Sound Financial System: Other factors that contribute to economic growth include openness to trade, which adds productive and rewarding jobs, and a sound financial system to promote savings and investment. China ranks ahead of India on these dimensions also. Hence, Government of India should take care regarding openness in foreign trade and a sound financial system. • Increase Investment Activity: Encouraging both domestic and foreign investments by creating a favourable business environment, simplifying regulatory procedures, and providing incentives for industries must be expedited. • Boost Exports: Promoting exports by identifying sectors where India has a comparative advantage, improving infrastructure and logistics, and providing support to exporters. • Enhance Female Labour Force Participation: Taking steps to increase the participation of women in the workforce through gender equality measures, access to education and skill development etc. • Generate Employment Opportunities in Formal Manufacturing: Focusing on creating more job opportunities in the formal manufacturing sector for low- and semi-skilled workers. This can be achieved through policies that promote the growth and productivity of the manufacturing sector, adoption of advanced technologies, and skill development programs. • Maintain a Conducive Investment Climate: Continuously improving ease of doing business, reducing bureaucratic hurdles, enhancing transparency, and strengthening governance to attract investments and boost economic growth. • Emphasise Education and Skill Development: Investing in education and skill development programs to equip the workforce with the necessary skills for the evolving job market, fostering innovation and entrepreneurship. • Strengthen Infrastructure: Prioritising infrastructure development, including transportation, logistics, power, and digital connectivity, to support economic activities and facilitate trade and commerce. • Foster Regional and International Collaborations: Actively engaging in regional and international collaborations to expand market access, participate in global value chains, and leverage opportunities for growth and development. India has to improve its infrastructure and economic growth substantially to compete with China. But it seems that the private sector won’t act until it is more confident about politics. • Indian democracy is beyond vibrant, whereas China remains a one party state: For example, when the Chinese government wants to build a high-speed rail line, they just acquire the land and move and compensate the adversely affected people. But, in India, a regular ironic complaint is “too much democracy.” In India every development activity is politicised. Hence, Government must act firmly and deal strictly regarding all development activities in the interest of our nation. • Economic Decoupling from China: It is infeasible in the near to medium term because the Chinese economy is deeply intertwined with the Indian economy. Hence, India can play an important role in enhancing economic growth by creating employment, strengthening the manufacturing sector, improving infrastructure, and increasing exports under Indian government’s Atmanirbhar Bharat Abhiyan (“self-reliant India campaign”) with the mutual cooperation with China. • Mutual Cooperation: Economic decoupling will not restore the status quo ante on the disputed border. In the era of globalisation, trade and mutual cooperation with every nation is vital. Hence, India should focus on enhancing exports and improving market access in China to reduce its trade deficit. • Transparent and Rational Protocols: India to develop transparent and rational protocols to increase Chinese investments in a sensible and secure manner. • Protectionism: The Indian government should realize that protectionism is not a solution for the country’s economic and political problems and instead undertake further economic reforms to boost national economic growth. Conclusion: To conclude, from an economic perspective, China's demographic characteristics are currently optimal for supporting economic growth, but in coming decades China will have to cope with a rapidly aging population and a shrinking working-age population. By contrast, India has two more decades before for its demographic window begins to close. Whether India will be able to reap a demographic dividend will depend on its ability to meet the challenges of improving its educational system and closing gender gaps in education, improving its health care system, enhancing its infrastructure, and incorporating more women into the workforce. India has one of lowest female workforce participation rates in the world, and one of the least educated populations in Asia. Increasing educational attainment and women's involvement in the workforce would give India's economy an additional impetus for growth by expanding the labour force at a rate that exceeds the rate of population growth, while also improving its quality. India presents an immensely attractive opportunity for global businesses. With its vast market, abundant labour force, and stable government, it serves as an ideal destination for manufacturing and investment. However, to fully harness its potential, India must take proactive measures to enhance its competitiveness on the global stage. By implementing strategic reforms and creating a favourable business environment and infrastructure, India can solidify its position as a highly enticing hub for businesses worldwide. References: 1. World Bank: Nominal, PPP, Nominal Per Capita, PPP per capita & IMF. 2. World Economy Rankings List 2024. 3. UN - World Population Prospects, 24 January,2024. 4. World Development Indicators, World Bank, 2023. 5. World Population Prospects, United Nations Population Division, 2022. 6. World Urbanisation Prospects, United Nations Population Division, 2018. 7. Statistical Review of World Energy, Energy Institute, 2023. 8. Focus Economics Consensus Forecast – November,2022. 9. Why is China Growing So Fast? Mohsin S and Zuliu Hu, IMF June,1997. 10. How India can take benefit of China’s Economic Crisis – The Economic Times, 18/12/2023. 11. U.S. Census Bureau, International Data Base, 2010. 12. India’s Demographic Dividend: The Key to Unlocking Its Ambitions – Sophie Maltin, Senior Economist at S&P Global Marketing Intelligence and Ashima Tyagi, Economics Associate Director at S&P Global Marketing Intelligence.