20180205-NATIXIS-Could_India_overtake_China__10页_904kb

报告摘要

Summary of "Flash Economics: Could India Overtake China?"

Core Content

This document explores the potential for India to overtake China in GDP in the future, analyzing demographic, economic and structural factors that influence this possibility.

Main Questions

Will India's population overtake China's?
Can India's GDP catch up with China's?
What conditions are necessary for this to happen?

Key Factors for GDP Catch-Up

India's GDP is projected to overtake China's in the future, but several challenges must be addressed:

1. Demographics

India's population is expected to overtake China's by 2022.
India's working-age population will surpass China's by 2028.
However, India's employment rate is still lower than China's, especially in urban areas.

2. Employability

The employability of the working-age population in India needs to increase significantly.
Educational attainment is much lower in India compared to China, especially in secondary and higher education.
A large portion of the Indian population is still uneducated or lacks formal schooling.

3. Labour Productivity

Labour productivity in India remains low and has grown at the same pace as China since 2005.
To catch up, India must increase productivity through investment, capital modernisation and improved public infrastructure.

4. Investment and Infrastructure

Investment levels in India are lower than in China.
Capital modernisation is weak, and public infrastructure is underdeveloped.
China has more advanced transport infrastructure, such as roads and ports.

5. Rural Exodus

The rate of rural population decline in India is slower than in China.
This limits the availability of a skilled and mobile workforce for urban employment.

6. Savings and External Deficit

India faces a low national savings rate, which leads to a chronic external deficit.
Currency crises, triggered by the withdrawal of foreign capital, cause exchange-rate depreciation and weaken growth.
Preventing these crises requires improving the savings rate.

Main Viewpoints

India has a demographic advantage, with a growing population and a large working-age group.
Employability and education are critical barriers to growth.
Labour productivity must increase rapidly for India to close the gap with China.
Investment, capital modernisation and infrastructure are essential for productivity growth.
Rural exodus is not as rapid in India as in China, limiting the potential for urban employment expansion.
Recurring crises, such as currency and balance-of-payments issues, hinder growth and must be averted.

Key Information

Population and Employment Trends

India's population will overtake China's in 2022.
India's working-age population will surpass China's in 2028.
Urban employment in India is lower than in China, indicating a need for better urbanisation and employment opportunities.

Education Levels

India's educational attainment is lower than China's, especially in secondary and higher education.
Illiteracy rates in India are significantly higher than in China.
Youth education in India lags behind China's, with fewer completing primary education.

Investment and Productivity

Total investment in India is lower than in China.
Non-construction investment is also lower, affecting long-term growth.
Industrial robot stock per 100 jobs is very low in India, indicating weak capital modernisation.
Labour productivity in India has been stagnant, while China has seen consistent growth.

Infrastructure

Transport infrastructure (roads, railways, ports) is more developed in China.
Electricity production per capita is lower in India, affecting productivity and economic activity.

Economic Challenges

National savings rate is low in India, leading to a chronic external deficit.
Currency crises are frequent, causing exchange-rate depreciation and trade term deterioration.
GDP growth in India has been affected by these financial instabilities.

Conclusion

India has the potential to overtake China in GDP due to its demographic advantage, but this requires significant improvements in education, investment, capital modernisation, and infrastructure. Additionally, India must address recurring financial crises and enhance its national savings rate to sustain long-term growth. Without these changes, the gap in productivity and employment will likely persist, limiting India's ability to catch up with China economically.

Disclaimer

The document is intended for professional and qualified investors only.
It is strictly confidential and must not be disclosed to third parties without prior written consent from Natixis.
It does not constitute a personalized investment recommendation and is based on public information.
No liability is accepted for the accuracy, completeness or reliability of the information provided.
The views expressed are those of the authors and may differ from those of Natixis or its affiliates.

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