While China seeks to reverse its aging population growth, the «two-child policy» may be too little too late to significantly reshape fertility trends after decades of restriction.

With more than 2.7 billion people, China and India together account for one-third of the world's population. The two demographic giants of the world have a huge and growing market of consumers, according to the 9th edition of the .

India Expected to Overtake China

The report was launched by the Credit Suisse Research Institute (CSRI) on Monday at the 22nd Asian Investment Conference in Hong Kong. While China seeks to reverse its aging population growth, the «two-child policy» may be too little too late to significantly reshape fertility trends after decades of restriction.

In contrast, India’s fertility rate remains above the replacement rate of 2.1 children per woman, maintaining a decent population growth. With higher fertility rates and strong population growth, India is expected to overtake China’s long-held position and become the most populated country in the world in the early 2020s, according to the UN population prospect.

Spend Differently

Equally, with India’s working-age population soon to surpass China, India may have better demographics for growth. As a result, China’s aging population should spend differently than India’s large working population.

  • China enrichment has also been very impressive. According to the report, in the last 18 years, wealth per adult in China has multiplied by eleven times, (from $4,000 to nearly $50,000 today), compared to four times in India (from $1,826 to $7,024).
  • China’s aggregate wealth increased from $3.7 trillion in 2000 to $51.9 trillion in 2018, compared to India, which went from $1 trillion to $5.9 trillion in 2018.
  • To put both economies into perspective, India aggregate wealth today represents only 10 percent of China’s. And according to developed economies standards, a large majority of its population is still poor; with 91 percent of its population in the 0 to $10,000 wealth bracket.
  • However, due to its very large demographic advantage, India ranks 12th in the world in terms of total wealth and de facto consumption power.
  • China ranks second benefiting from good demographics and important wealth creation. In the past 18 years, 52 percent of the population moved to the $10,000 to $100,000 wealth bracket, while 7 percent of the population moved to the $100,000 to $1,000,000 one.
  • Similarly to developed economies, nearly 70 percent of wealth is held by the top 10 percent of earners in both China and India – accumulation of wealth is not homogeneous.