A prime reason India is developing into the world’s next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic crunch in China. Because of China’s “one child” policy, family sizes have been shrinking since the 1980s, so fewer young people will be available soon for factory labor.
India is not expected to pass China in population until 2030. But India will have more workers ages 20 to 24 by 2013; the International Labor Organization predicts that by 2020, India will have 116 million workers in this age bracket, compared with 94 million in China.
India’s young population will also make it a growing market for years to come, while the engineering and English skills of its elite will make it competitive across a wide range of industries.
Higher labor costs in China vs India:
By contrast, cities in the southeastern Chinese province of Guangdong raised monthly minimum wages this summer by 18 percent to between $70 and $100 a month after factories reported having one million more jobs than workers to fill them. Factories elsewhere in China face fewer labor shortages, but they also are being pressured to raise wages.