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Geopolitics

China v. India: A New Twist In Asia's "Billion Club" Rivalry

The news that China's population has shrunk for the first time in 60 years, comes as India appears to be outperforming its giant neighbor on a number of fronts. But this reversal of fortune still has too many variables to predict the demise of one or the rise of the other.

Photo of a crowded street in Hyderabad, India

Street scene in Hyderabad, India

Pierre Haski

-Analysis-

PARIS — China and India have at least one notable feature in common: the Asian giants are the only two countries in the world with a population above one billion. Yet Beijing announced this week that China has registered its first decline in number of inhabitants after 60 years of continuous expansion. This comes as India’s population continues to grow — on the path to overtake China as the world's most populous country.

Another related point of comparison is economic growth. For years, we had gotten used to China lifting the overall global growth numbers. That is no longer the case, with growth having reached slightly more than 3% in 2022, about half the rate of the previous year, and well below forecasts.

In contrast, India is posting solid growth figures, 8.7% in 2021, nearly 7% last year, and a target still above 6% this year.

Balance of power


So, has India found the magic formula for its economic development, just as China is losing its luster? The answer to this question is inevitably as much about geopolitics as it is about economics — and helps explain how the cards are getting shuffled across the globe.

The most spectacular economic result in recent years is the considerable drop in the number of people living below the poverty line. And that number is expected to continue to fall, with experts forecasting that India will become the third largest economy in the world in 2027, doubling its gross domestic product within a decade.

However, India hasn’t solved all its problems, and its progress remains fragile. It is still a very bureaucratic country, with structural inequalities, and dispersed political power.

China v. India is also an issue that impacts the global balance of power.

India is also struggling with the effects of such factors as drought, and the weight of Prime Minister Narendra Modi’s Hindu nationalism, which threatens its much-vaunted standing as the "world's largest democracy."

The question is not only one of the historical rivalry between two giants that have indeed been at war in the past — and still face off occasionally in border skirmishes. But China v. India is also an issue that impacts the global balance of power.

China has been the world's economic locomotive for more than 20 years. Yet today, India is presented as an alternative to China, a country now suffering from the consequences of its choices, whether related to COVID or Xi Jinping’s ideological stiffening, or a latent confrontation with the United States.

Photo of a person holding Indian banknotes

"Will India be able to sustain the ingredients that are driving its current growth?"

Ayaneshu Bhardwaj

Cold War tensions and Rafale jet sales

The rest of the world has been attentive to what is at stake here. For example, French President Emmanuel Macron intends to visit both China and India this coming summer. In the first case, Macron intends to save a relationship that has been threatened by an atmosphere of a new Cold War. On the other hand, France sells Rafale fighter jets and submarines to India, as the two countries are currently developing an even closer business partnership.

The future of the world's only billion-people nations is still to be written. Will India be able to sustain the ingredients that are driving its current growth? Will China emerge from the current state of tension and uncertainty it has entered? Much of the rest of the world depends, to some degree, on the answer to these questions.

So look at today's numbers, but remember there's a lot they don't tell us.

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