India has a rapid GDP growth rate, as high as 7.5 percent in the recessionary 2009-10 years. China too, has not skipped a beat in its blistering growth. However the economic effects of a smaller percentage of younger population are expected to show up in 30 years. This will mean fewer resources to deploy in critical manufacturing and services for export in which these countries have specialized, less availability of specialized labour to meet the growth rates needed to continue growth, a skewed distribution of labour in several fields and of course, the dangers of a gender imbalance. At present the danger of a small cohort of young people supporting the aged does not seem imminent, as the percentage of younger people is quite high in these countries. One-fifth of the total world population under 20 years of age is in India. As they enter the labour force the opportunities and resources are bound to be stretched, but the market that they represent as consumers in an expanding economy will be sizable.
Here is the paradox of population economics in simple terms. The world over, statistics on population remind us that hunger, disease, malnutrition, unemployment, underemployment, exploitation and other ills stalk the majority of the population. Countries that have sought to implement population controls have mostly been socialistic in the past or continue to be so today to some extent. It is easy to understand why. A socialistic view of population regards it as a partaker of the total wealth of the nation. The fewer the people, the better the per capita income. This is true for countries in which the buying power of people is less. When GDP rates remain low, resources get divided again and again, translating into smaller populations. Land is one such resource. But standards of living are based on many other goods than simply the limited natural resources of the world. India and China realized several years ago that their populations are an asset to them in an export-oriented, free trading, outsourcing world. Large teams in India could be deployed very quickly to provide application development services or financial and accounting services, while large masses of the rural population in China could find employment in the manufacturing boom towns on the east coast. In the past 15 years these workers have also increased domestic consumption in these countries, leading to stronger economies that have so far withstood the assault of the global recession. As income rates grew, and national GDP grew consistently over a decade, these countries began thinking along new lines concerning their populations, asking who are the employable people within their population.