Boom or burden? India and China show how population can make or break economy

In its latest analysis, the Al-Shall report shed light on a fact that a country’s population can either be a burden or a strategic advantage, depending on how effectively the economy performs. This dual perspective is best illustrated by comparing the experiences of the world’s two most populous nations — India and China.

As of the end of 2024, India’s population stood at approximately 1.442 billion, slightly higher than China’s 1.408 billion, according to data from the International Monetary Fund. Together, the two nations represent around 35.1% of the global population. Their contrasting trajectories demonstrate how population density can either hinder or fuel economic growth, according to Al-Jarida report.

Following its 1949 revolution, China faced severe economic hardship, leading to widespread hunger through the 1960s and 1970s. In 1980, the country viewed its population as a liability and introduced its well-known “one child” policy to curb growth. India, meanwhile, also struggled economically but lacked the centralized authority to enforce strict population controls.

By 2022, India surpassed China in total population for the first time. Moreover, India’s demographic profile, marked by a large and youthful population, has become a powerful engine for its economic development.

Recognizing the unintended consequences of its population policy, China began to reverse course — first allowing two children per family in 2015 and then three in 2021. The goal was to reinvigorate its shrinking youth base and support long-term economic growth.

China’s transformation began in the 1980s after major leadership changes, leading to its rise as a global economic powerhouse.

From a 2.7% share of global GDP in 1980, China’s economy expanded to 17.0% by 2024. However, due to the aging population and reduced youth workforce, its growth rate declined from over 10% before 2010 to a projected 4% in 2025 and beyond.

India, by contrast, leveraged its demographic dividend. Between 2000 and 2015, India’s economy grew at an average of 6.9%, and between 2015 and 2024, growth averaged around 6.1%. It is now expected to grow at approximately 6.4% annually —1 .6 times faster than China. After becoming the world’s fifth-largest economy in 2021, India is poised to become the third-largest in the coming years.

In conclusion, the Al-Shall report emphasized that a large population can either obstruct or accelerate development. When matched with a robust economic model that prioritizes education and values, population becomes a country’s most powerful asset.

Singapore exemplifies this principle. Despite lacking natural resources, the city-state of 5.9 million people has transformed its human capital into wealth, with its GDP expected to reach $565 billion in 2025 and per capita income nearing $93,000 — the fourth highest in the world.