{
  "id": 16804035,
  "title": "Commentary: Smaller populations need not shrink China and India’s growth",
  "url": "https://urgent.news/2026/10/27/commentary-smaller-populations-need-not-shrink-china-and-indias-growth",
  "topic": "world",
  "section": "World",
  "published": "2026-10-27T21:58:00.000Z",
  "source": {
    "name": "Channel News Asia",
    "slug": "channel-news-asia",
    "url": "https://www.channelnewsasia.com/commentary/china-india-fertility-productivity-jobs-growth-6495996"
  },
  "original_language": "en",
  "account": "In recent years, governments have shifted from worrying about too many people to concerns about having too few. While a shrinking workforce can slow growth, it is not the sole determinant of an economy's prospects. China and India, the world's two most populous countries, provide a clear contrast in this regard.\n\nChina's population has been shrinking since 2022, while India's fertility rate fell below replacement level in 2026. Despite this, both nations are projected to maintain high economic growth rates in 2026, with China at 4.6% and India at 6.4%, both surpassing the global rate of 3%.\n\nChina's shrinking population, however, does not guarantee lower output if workers remain healthy, productive, and employed for longer periods. In China, workers' earnings tend to increase after entering the labor force, peaking around age 40. Conversely, Indian workers experience a lower peak but enjoy a more evenly distributed earning potential across a longer working life.\n\nThese patterns suggest that India's growth stems from more people entering the labor force, whereas China must address its shrinking workforce through increased productivity. China's educational expansion, increasing tertiary enrollment from 29% in 2012 to 77% in 2024, has produced a larger supply of highly educated workers. Yet, the challenge lies in translating these gains into productive employment opportunities.\n\nThe intense competition for education, jobs, housing, and social mobility among China's younger generation highlights the intensifying \"involution\" - a phenomenon where greater effort yields diminishing returns. This is particularly evident in the difficulty for graduates to find suitable work or endure lengthy competitions for limited positions.\n\nTo overcome this challenge, China must shift its focus from merely producing more college graduates to effectively utilizing their skills. This requires redirecting capital towards more productive sectors, reducing barriers in services, and promoting a more level playing field for businesses. Expanding services can provide employment opportunities for graduates and meet rising domestic demand.\n\nDemand-side factors also play a crucial role. When households are reluctant to spend, firms have less incentive to hire and innovate, and exports alone cannot absorb all new graduates or sustain growth indefinitely. Strengthening social protection and encouraging household consumption can create markets for better services, while fostering open competition will reward firms that efficiently utilize skilled workers.\n\nChina's successes in advanced manufacturing demonstrate that its trained workforce can drive innovation. However, the challenge lies in disseminating these gains across more firms and sectors rather than assuming that a few leading industries can absorb all graduates.\n\nIn contrast, India faces a different set of challenges. Despite having a large working-age population, a significant portion of the labor force remains in low-productivity work. In July 2023-June 2024, 46.1% of workers were in agriculture, while only 11% worked in manufacturing. Improving access to scale hiring and promoting better-paying jobs is essential, but new jobs are concentrated in small and informal businesses or low-productivity sectors.\n\nIndia's education sector has historically underinvested, spending a relatively low share of its GDP on education compared to many other countries. Although educational spending has increased over the past two decades, it remains modest at 4.1% of GDP in 2025. Simply increasing educational spending is insufficient to boost productivity. The quality of education and skill development programs need improvement, as college-educated youth often struggle to find jobs that match their qualifications and expectations. Indian women face additional barriers, with labor force participation remaining among the lowest globally due to domestic care responsibilities, unsafe commutes, and limited access to formal credit. Enhancing transportation, childcare, and access to finance could enable more women to enter and remain in paid work, expanding the effective workforce without increasing birth rates.",
  "summary": "For countries facing shrinking populations, improving productivity may matter as much as increasing birth rates, say these academics.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}