We've been predicting it here for at least five years, and now it's finally happened: four years ahead of schedule, India has become the most populous nation on Earth, with a head count of 1,425,775,850 (as of 24 April), and 86,000 new citizens being born every day. For the first time since the United Nations started compiling records in 1950, China has been knocked off the population's top spot. And don't be fooled for a moment into thinking this is just so much foam and figures: the Subcontinent's startling advance also has real-life consequences for two of the most powerful economies on the Planet…and for everyone else.
China continues to struggle with the social and economic consequences of an increasingly ageing population: an entirely self-induced "problem", which results from its "one-child policy" introduced back in the 1980s, and the stark demographic shift towards Sino Silver Surfers and Beijing Bingo Enthusiasts (neither of them any sort of issue in themselves) has significantly affected what economists like to call the Marginal Propensity to Consume: that's the measure of just how many of those extra Yuans in the average Chinese Kǒudài (a pocket to you and me) are either being spent or saved. Because, as we all know, it is universally acknowledged that the older you get, the less of your hard-earned cash you're likely to be spending…just ask your mum and dad if you don't believe me.
Consumer spending is the beating heart of any modern economy. Every Yuan, Dollar, and Rupee stashed under the bed, or left languishing in a bank account, is one less Yuan, Dollar, and Rupee being put to gainful employment in stimulating consumer demand. Added to which, in absolute terms, the number of Chinese working-age adults has fallen by 38 Million over the last three years, so there aren't as many hard-earned Yuans to go around either…meaning less of a significantly smaller pot is currently being spent in China, and on any basis that's a headache for the economic planners in or near the Central Politburo.
Tilted to Spend
Youngsters, on the other hand (by which I mean anyone under thirty), well…youngsters do it all the other way around. Their marginal propensity meter is firmly tilted towards spend. In contrast with their mums and dads who already have cars (or bicycles), televisions, and computers (not to mention houses), the younger set more or less have to buy all this for themselves from scratch, along with a raft of other consumer goods, and that means there's precious little cash left over to stash under the bed, or in a bank …my children can certainly testify to that, and I expect yours can too.
In short, consumer demand goes up when income is channeled to a younger demographic.
So here's the important point: the average age of all those 1,425,775,850 Indian citizens is just 29, added to which forecasts predict the overall demographic on the Subcontinent will stay refreshingly youthful for at least the next twenty years. Powered by the teeming numbers of a burgeoning population, increasingly urbanised, ever more wealthy, and more than ever inclined to spend the Rupee in their jeb, it a small wonder the Subcontinent has now overtaken the UK as the fifth largest economy in the World, ready, willing and able to take its place at the top economic table.
Twenty-nine is a magic number…and India is reaping the benefits.
Executive Overview
The fact India has now overtaken China as the most populous country on the Planet is not simply of statistical interest: the Subcontinent's burgeoning population of younger, more affluent, and consumer-hungry citizens is also fuelling an economic revolution.
Invest in Red Ribbon Asset Management
Red Ribbon Asset Management (www.redribbon.co) aims to harness the full potential of fast evolving and emerging technologies to meet the needs of global communities as part of a circular economy, fully recognising the compelling demands of planet people and profit.
Leave a Reply