China and India, 2025: a Comparative Assessment
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This electronic representation of RAND intellectual property is provided for non-commercial use only. Unauthorized posting of RAND electronic documents to a non-RAND website is prohibited. RAND electronic documents are protected under copyright law. Permission is required from RAND to reproduce, or reuse in another form, any of our research documents for commercial use. For information on reprint and linking permissions, please see RAND Permissions. This product is part of the RAND Corporation monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND mono- graphs undergo rigorous peer review to ensure high standards for research quality and objectivity. China and India, 2025 A Comparative Assessment Charles Wolf, Jr., Siddhartha Dalal, Julie DaVanzo, Eric V. Larson, Alisher Akhmedjonov, Harun Dogo, Meilinda Huang, Silvia Montoya Prepared for the Office of the Secretary of Defense Approved for public release; distribution unlimited Approved for public release; distribution unlimited NATIONAL DEFENSE RESEARCH INSTITUTE The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center sponsored by OSD, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community under Contract W74V8H-06-C-0002. Library of Congress Cataloging-in-Publication Data China and India, 2025 : a comparative assessment / Charles Wolf ... [et al.]. p. cm. Includes bibliographical references. ISBN 978-0-8330-5042-7 (pbk. : alk. paper) 1. Economic development—China—Forecasting. 2. Economic development— India—Forecasting. 3. China—Population. 4. India—Population. 5. Technological innovations—China. 6. Technological innovations—India. 7. China—Armed Forces—Appropriations and expenditures. 8. India—Armed Forces—Appropriations and expenditures. I. Wolf, Charles, 1924- II. Rand Corporation. HD77.5.C6C45 2011 338.951054—dc23 2011029057 The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. © Copyright 2011 RAND Corporation Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND documents to a non-RAND website is prohibited. RAND documents are protected under copyright law. For information on reprint and linking permissions, please visit the RAND permissions page (http://www.rand.org/ publications/permissions.html). Published 2011 by the RAND Corporation 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 4570 Fifth Avenue, Suite 600, Pittsburgh, PA 15213-2665 RAND URL: http://www.rand.org To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] Preface China and India will exercise increasing influence in international affairs in the coming decades. As prominent members of the G-20, their influence will be manifest in the global economy, in global politics, and in the global security environment. Each coun- try’s role on the world stage will also be affected by the progress that it makes and by the competition and cooperation that develop between them. The research described in this monograph focuses on the progress China and India seem likely to achieve from 2010 through 2025, as well as on some of the major problems they may encounter along the way. This research consists of a com- parative assessment of their prospects in this period in four domains: demography, macroeconomics, science and technology, and defense spending and procurement. In each domain, the assessment seeks answers to these questions: Who is ahead? By how much? and Why? Often the answers are quantitative, sometimes they are more qualitative, and sometimes they are inconclusive. The monograph concludes with implications for policy and for further research. In view of this scope, this document should be of interest to decisionmakers and analysts in the executive branch, in Congress, and among the larger public. This research was sponsored by the Director of Net Assessment in the Office of the Secretary of Defense and conducted within the International Security and Defense Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community. For more information on the RAND International Security and Defense Policy Center, see http://www.rand.org/nsrd/about/isdp.html or contact the director (contact information is provided on the web page). iii Contents Preface ................................................................................................. iii Figures ................................................................................................. ix Tables .................................................................................................. xi Summary ............................................................................................. xiii Acknowledgments .................................................................................. xxi Abbreviations ...................................................................................... xxiii Chapter One Objectives, Background, Context ................................................................. 1 Chapter TwO Population Trends in China and India: Demographic Dividend or Demographic Drag? ............................................................................................... 7 Population Growth and Its Components ........................................................... 7 Birth Rates ............................................................................................ 9 Death Rates .......................................................................................... 12 Population Growth Rates .......................................................................... 13 Age-Sex Structure of the Population ................................................................ 14 Working-Age and Dependent Populations ........................................................ 16 Youth ................................................................................................. 16 Working-Age Population ........................................................................... 17 Older Population .................................................................................... 18 Dependency Ratios ................................................................................... 19 Sex Ratios .............................................................................................. 21 Opportunity to Reap a Demographic Dividend ................................................. 22 Education ............................................................................................ 25 Health ............................................................................................... 26 Women in the Economy .......................................................................... 27 Infrastructure ....................................................................................... 28 Other Implications of Changes in Population Age-Sex Composition .......................... 29 Implications of Gender Imbalances and the Changing Composition of “Dependents”.... 29 v vi China and India, 2025: A Comparative Assessment Implications for the Armed Forces ............................................................... 30 Regional Differences ................................................................................. 31 Uncertainties and Alternative Scenarios ............................................................ 32 Summary Assessment of the Relative Strengths and Weaknesses Brought About by Demographic Trends in China and India ..................................................... 33 Chapter Three China-India: A Macroeconomic Assessment ................................................... 37 Introduction: Forecasts of Economic