Data Lab | Are China’s women turbocharging its economy? Can India catch up?

In the grand global population race, India has emerged as the frontrunner, boasting a colossal population of 1,428 million people, just edging past China’s 1,425 million. It’s a neck-and-neck population contest, but when you peek at their economic narratives, a contrasting tale unfolds.

As per the most recent World Bank data from 2022, China’s gross domestic product (GDP) looms large at 17.96 trillion USD, while India’s registers at a comparatively modest 3.39 trillion USD. What’s noteworthy is that this economic chasm is only growing wider.

The graph above shows the widening gap in Gross domestic product (GDP) between China (in red) and India (in blue). 

Rewinding to 1980, China and India’s economic landscapes were very similar, with GDP numbers almost in lockstep. India even held a slight edge in GDP per capita over its much larger neighbour to the east. However, China embarked on a monumental journey, with its economy surging at an astonishing average rate of 10 per cent between 1980 and 2010, leaving India trailing far behind.

The reasons behind China’s meteoric economic ascent are multifaceted. Yet, a pivotal factor lies in the increasing participation of women in China’s workforce, adding an extra dimension to its growth story.

With male labour force participation nearly on par in China (73 per cent as per 2022) and India (74 per cent as per 2022), the divergence primarily stems from female involvement. In 2022, China boasted a robust 61 per cent female labour force participation rate, whereas India lagged significantly at just 24 per cent.

India can no longer attribute China’s larger population as the sole rationale for its superior GDP. This prompts a crucial question: does this surplus of female labour participation truly underpin China’s formidable GDP? Maybe, Yes.

“The high participation of women in the workforce in China is a combination of its socialist legacy and subsequent economic reforms and opening up after Mao Zedong’s (Chinese communist leader and founder of the People’s Republic of China) passing. The high level of investment by the state in human capital, education and health is one of the key achievements of Mao era (1949-78). It also emerged from the socialist understanding that both men and women had to participate in labour – starting from agricultural production,” Dr Anand P. Krishnan, Fellow, Centre for Himalayan Studies, Shiv Nadar Institution of Eminence, Delhi NCR, and Visiting Associate Fellow, Institute of Chinese Studies in Delhi told WION.

Following initiatives to protect women’s rights, including the marriage law passed after the People’s Republic’s establishment, Chinese women have enjoyed increased mobility and opportunities. This trend continued with economic reforms since the 1980s, leading to more women pursuing higher education and careers. Declining urban birth rates reduced childcare responsibilities, allowing women to delay starting families. Marriage rates have fallen as women prioritise careers, leading to a rise in female CEOs and a strong presence in retail and service industries. They are also increasing moving to heavy labour intensive sectors – like women constitute nearly 14-16 per cent of all construction workers, explains Dr Krishnan.

The recent dip in the female labour force participation rate to 61 per cent has also got the Party-state to come up with plans to address it. Such as a 10-year plan for women’s development.

The Party-state is also intending to ask employers not to mention gender preferences in job advertisement, and also not ask women about their marital and pregnancy status.

“However, notwithstanding this, things are not rosy for women. With the removal of the one-child policy, with the Party-state incrementally raising it to two-child and now three-child, women are now forced to juggle with both work and childcare,” continues Dr Krishnan.

In a study titled ‘The Elephant is set to overtake the Dragon, or is it?,’ conducted by the Centre for Economic Data and Analysis (CEDA) under Ashoka University, there has been a revelation that further fortifies this argument. According to the research, as of 2021, China boasted approximately 478.3 million women aged 15-64, while India’s count stood at 458.2 million women in the same age bracket — a disparity that seems slight. However, the female labour force participation rates for that year painted a strikingly different picture; China’s workforce encompassed a formidable 338.6 million, whereas India’s tally was a mere 112.8 million. So, even though India’s working-age demographic group almost mirrored China’s in size, but its labour force was noticeably smaller.

*This is an interactive data chart. Click on the bars to get the figures*

When can we expect India to surpass China in terms of its labour force?

The study suggests that this won’t occur in the near future, but there’s a glimmer of hope. If we assume that the labour force participation rate (LFPR) remains constant at its most recent levels for both countries, it’ll be approximately 27 years before this milestone is reached. It’s only in 2051 that India is projected to outpace China in terms of labour force numbers, assuming all other factors remain unchanged. These projections are based on United Nations population estimates spanning up to the year 2100.

Now, if India’s LFPR were to surge to 60 per cent, this shift could occur by 2040. However, for India’s labour force to surpass China’s in absolute numbers by 2030, India’s LFPR would need to make a sharp jump from its current level, which hovers at around 58 per cent (based on the labour force participation rate by usual status for the 15-64 age group as estimated by the Periodic Labour Force Survey, 2021-22), to 71 per cent within the next seven years. Achieving such a significant improvement in such a short span of time seems highly unlikely.