Free Custom «Chindia Resource Productivity» Essay Paper

Resource productivity views how one extracts added value from naturally occurring resources. In china, several resources are vital for its growth and survival for example water resources, human resources and environmental resources. Therefore management of such resources is highly required so as to achieve efficiency.

China generally has abundant water resources but scarce in some regions. Agriculture is the main activity that uses water in China, taking up to 78% of water usage. However, the quality of groundwater and surface water in China is a problem because it is either contaminated by man-made or natural activities. Man-made contaminations include chemical spills such as pesticides and fertilizers. Nevertheless, China is one of the world’s most recognised countries for a long history in building water resources. According to the Ministry of Water resources in China, some of the historical achievements are, the legendary flood harnessing by the Great Yu, Dujiang Weir irrigation system, the Grand Canal, etc.

China is characterized by a large population and rich human resources. For years, the Chinese Government has pursued effective policies to enhance the development of human resources, bringing about drastic changes in this sector. Some of these improvements include remarkable improvement in the education sector as evidenced by the increased number of college and university graduates. The number of people employed in the tertiary industry has also increased. There has also been the gradual improvement of healthcare, income and generally, the people’s standard of living.

 

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Environmental resources in China include mineral deposits such as coal and oil. Other resources that are driving China forward are, large scale manufacturing and exports. China exports oil products and coal. It could also be argued that China serves as the world’s workshop, due to its huge factories (Pongsak, 2007).

Human resource is the main natural resources driving India economy. Sustainability of workers and consumption market is sustainable due to demographic advantages projected in the future. India is having an impressive outcome by reforming the global economy in the following ways; supplying the rising demand for a competent, highly skilled and relatively inexpensive workforce and moving towards total convertibility of the Indian currency, the Indian Rupee that is made possible by its growing foreign exchange reserve. To enable rapid growth of the economy, India requires better infrastructure, more foreign investment and an open policy towards foreign trade. Luckily, the Indian government has taken several steps towards achieving this by simplifying regulations required to set up a business, allowing more foreign possession in several sectors and establishing special economic zones, which will help in development by specific zones. India is taking giant steps towards being an economic giant come 2050.

In terms of resources, Chindia is approximated to consume 45-50% of global natural resources a factor that will make it the largest exporter of manufactured commodities in the world, according to Hong Kong-based investment group CLSA. It is evident that China and India have a bright future and are fast approaching economic recognition.

This is a review of current trends of demography in China and India and the impact it has on future economic development of Chindia. This demography is derived from the U.S. Census Bureau’s International Data Base (IDB) due to its accessibility of both chronological information as from 1950, and future anticipations through to 2050, and also due to the fact that the bureaus data is concern about Chinese mainland upon which this demography focuses on. The Census Bureau also rationalized recent data about India in June 2009, and about in December 2009.

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India and China are the only nations in the world with huge populations of up to a billion and above. Presently, the rate of population growth in India is almost double that of China (1.55 percent per year, against 0.66% for China) and in 2025, its total population will equal that of China (approximately 1.4 billion per country), surpassing China’s thereafter (Wolf et al, 2011). The population of India will increasingly surge through at least 2050, whilst China’s will climax at about 1.5 billion in 2032, reducing thereafter. The IDB estimates that China has a population of about 1.330 billion people while that of India is about 1.173 billion people, with India’s rate of population growth being above that of China since early 1970s. By 2050, India’s population is estimated to rise up to 1.656 billion overtaking that of China in 2025, whereas the Chinese population is estimated to attain a maximum of 1.395 billion by 2026 with projections of its downfall thereafter.

In both India and China, the present birth rates considerably surpass the death rates. The population change of a country is calculated by deducting the number of deaths from the number of births plus the net sum international migration.

There exists a lessening gap between the number of births and deaths in China and also India. This has led to reduced growth of total population in both countries. All through the period between 2000 and 2035, the population growth rate is projected to be more minimized in China than in India. Population growth in India has been declining even before 2000 and is expected to keep on at an approximately equal rate throughout the period shown (Wolf et al, 2011). Although the rate of population growth in India is considerably higher than that of China, a flat rate for China has been seen between 2002 and 2011 and further decrease is estimated to go beyond that of India subsequently. As from 2027, number of births in China is expected to be less than the number of deaths, a position which may lead to a massive loss of population.

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Life expectancy at birth shows an increasing trend in both China and India through the period 2000 to 2035. India’s CBR (Crude Birth Rates) is estimated to surpass the Chinese one within the duration of between year 2000 and year 2035. Within the period of 2020-2025, the disparities in CBR among the two countries is approximated to have slight reduction ( a difference of 7.2 to 7.4 per 1000 population) than what it was in 2010 (9.2 births per 1000 population, but it will later decrease to 6.4 per 1000 population by 2035 (Wolf et al, 2011). The average number of births per woman, i.e. the total fertility rate (TFR) is a fertility measure that is not determined by the amount of women who are in the age of childbearing in the population, and therefore TFR is preferred a better method of measuring population growth than CBR for contrasting fertility levels among countries within time periods. For many years, the total fertility rate (TFR) of China has been lower than India’s. The IDB projects that the total fertility rate in China is 1.54 children per woman, while in India it is 2.65.

Chinese and Indian population curve are set to cross each other by 2030. It’s highly projected that from 2032, India will take a demographic advantage in terms of population led growth over China by 10%. The population gap will be closed due to large acceleration of India population growth in recent years and China one Child policy. China and India are set to highly benefit from their demographic potential between today and 2050.

Public health is a factor that impacts not only on mortality rates and life expectancy, and subsequently rate of population growth, but also the degree to which people within the working age attains a level of productivity towards the economy. Good health may enable the older people to continue in their contribution to the economy even after retirement, even as enhancement of health long life stimulates people to save more for sequestration (Bloom et al, 2009). The well being of a population influences its earnestness for health care and capital committed to it.

Health statistics for current years and those anticipated for the future proposes that the benefit of this element goes to China. By 2004, the average person in China was in better health than an average person in India (Chatterji et al, 2008). Measurements on the burden of ailments in times of healthy, life lost is approximately above 50% in India (355 years per 1000 persons) as contrasted with China (260 years per 1000 persons). As further illustrated, 16.6 percent (one sixth) of respondents in China and almost half (46.9%) in India’s records having at least one chronic condition (Chatterji et al, 2008). According to W.H.O mortality rates from maternal, communicable, prenatal, and dietary conditions are higher for India than for China for every single cause.

The percentage of working age population will subsequently be impacted by all these variations in population age composition. This population is within ages 15-64 consisting of people who have the capability to contribute productively to the economy. There is also the dependent age (0-14 and 65+) population who are either too young or too old to sustain themselves through activity in labor market, and who are therefore out to be supported by others either through their families or the state.

The middle class in China and India is increasing fast. In China, accomplishment has seen powerful growth since the establishment of the reform and open up policy. The purchasing power of Chinese consumers has improved on average. It is likely that the average purchasing power in India will grow more swiftly in the coming years. The Asian Development Bank projects that the number of individuals with a middle class income, i.e. between $6,000 and $30,000, in Asia will increase to 2.7 billion by the year 2030. The middle class will grow strongly in China and India respectively.

Throughout the period between year 2000 and 2050, India is estimated to have higher percentage of young population (under age 15) compared to China, despite the fact that the overall percentage of young population in both countries is anticipated to decline steadily. Currently, the disparity between the two countries is at its peak and it will decline within year 2020-2025 to a rate of 8.8% lower than the present 12.2%. Employment rate is expected to increase dramatically in the future due to enlarged manufacturing and export sector.

Since the mid 1970s, the percentage of working age in China has been much above that of India (Ahya et al, 2006). Moreover, as evident from figure 2.9, this percentage was mounting in China more rapidly than India during the first decade of this century. This is mainly as a result of large population numbers who were born to China in the 1960s and the beginning of 1970s, and whose children born in 1980s and early 1990s joined them into the workforce (the effect of demographic echo), as illustrated by the analogous bulges in the population pyramids as evidenced in figure 2.8.

The working age percentage in India’s population is estimated to summit around 2030- the very year that China will be statistically surpassed by India in terms of population.

The general bulge in balance among the two countries is furthermore indicated by projections that the total amount of India’s working age people will surpass that of china in 2028. The U.S Census Bureau of 2010 states that in India; the number of estimated working age population will be 971 million people, while those of China will be about 956 million people. In addition, during the same period, India will have a much younger working age population than that in China, which will not only be a good foundation for growth but will also, create a necessity for entry-level jobs. For the mean time, China will have most of its population being within ages 35-64 (and especially ages 50 to 64). Nevertheless, it is vital to note that during 2020-2025 periods, China will have larger percentage of working age population with approximately 70.6% in 2020 and 69.2% in 2025, as compared to India with 67.0% in 2020 and 67.5% in 2025.

In 2010, China had 8.6% of its population being aged 65 or older, while India had 5.3%. In the two nations, this percentage will mount at a surging rate (figure 2.9). By 2025, these figures will be 14.3 percent in China and 7.7 percent in India, and a respective increase of 21.0 percent for China and 10.2 percent for India by 2035. The number of older people in both China and India by 2035 will be more than twice the present figures.

It is anticipated that during most of the 2020-2025 evaluation period, China’s population will remain larger than India, but that India will overtake China in size of population in 2025. China probably will persist in having higher GDP per capita over India; an aspect that is more meaningful than huge numbers of population. Due to increase in population and subsequent surge in income and affluence in both countries, domestic demands will increase resulting to increased consumption.

India will have more positive demographics in the future than China though the question of whether it will manage to harvest a demographic surplus will be determined by victorious government implementation of an ambitious agenda of economic growth. A national accord with a long-term point of view is required to improve education, infrastructure, health and women’s role while social peace is being maintained in a progressively more stratifying society.

As far as economic competitiveness between the two countries is concerned, their populations’ composition is more important than their cumulative size. The prime-working-age of Indian population will surpass the Chinese one in 2028. Furthermore, reflecting on the varying age composition of both populations, both economies will encounter very distinctive patterns in their general dependency ratios-i.e. the ratio of the elderly and the young to those of prime working age. The concept of dependency ratio presumes that people within 15 to 64 age brackets produce more than their consumption on average, while the vice versa is true for the younger and elderly. Increase in dependency ratio is normally seen as an obstruction to economic performance while declining ratios is viewed as a benefit. Even though the current dependency ratio of India is higher than that of China, the ratio will be soaring speedily in China in the coming two decades, whilst it will be reducing in India.

The equity of demographic gains and drawbacks will be affected by several other aspects including education, gender composition, health and inclinations of particular populations. For instance, China has a considerable healthier population than India, with China having an advantage of a more advanced system of health care. However, China’s population is aging more swiftly than India’s, due to the fact that a large proportion of China’s population is made up of the elderly. A lighter cost burden from this source will be for India since most of its population is made up of young people.

Education wise, China’s population has considerably higher levels of literacy than India. Nonetheless, if India can embark to face the challenge competitively by investing in human capital, it may attain an upper hand through productive employment of its increasing pool of young workers. Demographic trend give Chindia an advantage over any other economy in 2050. Chindia will have the highest pool of workers and largest domestic consumer in the world. Due to large domestic consumption, Chindia will be able to propel its growth even without the outside market.

Climate change is impacted by direct or indirect influence of human activity that disfigures the composition of world’s atmosphere and which adds to variation of natural climate observed over considerable time periods. Global emissions of Greenhouse Gases (GHG) as a result of human activities have continued to mount up, with a recent rise of 70% between 1970 and 2004. When the concentration of these GHGs increases, they tend to make the surface temperatures to rise. This increase in Earth’s average temperatures is known as global warming which probably cause unparalleled change of climate on a global scale endangering the ecosystems of the entire world. It is projected that during the 21^st Century there could be an increase in average global temperature by above 5 degrees Celsius. The developing economies have set commitments under the Climate Convention taking into account that social development and economic and eradication of poverty are the initial factors of developing countries.

The Indian economy lies heavily upon agriculture being its main stronghold for food production as well as livelihood security to a significant portion of Indian population. Given that, most of India’s arable land depends on rain, irregular patterns of rainfall causes adverse effects in agricultural production in India. This threatens food security and the entire economy is injured. Although about 70% of summer rainfall in India is crucial for agriculture, studies project that there will be reduction in summer rainfall intensity by 2050.

India’s growing population poses a great demand for water for domestic consumption, industrial use and for farming. There has been phenomenon increase in development of groundwater abstraction structures. Overexploitation of groundwater sources has been a major problem due to growing demand for water. Recent study proposes that by 2020, food production in India has to be increased to up to 300mt for it to feed its massive population. This poses a threat that the growing demand of food in the two forth coming decades may result in severe degradation of soil and climate change.

Influence of climate has also affected the coastal states in India. Due to rise in sea level, the coastal areas have been prone to flooding which cause destruction to coastal property and infrastructure. Furthermore, India’s Biodiversity has also suffered a great deal from change in climate. Outbreaks of diseases like malaria have their key source from the impacts of variation of climate.

With 17% of world’s population living in India, it’s the GHGs emissions amount to 4%. India stands to propagate equity in world’s climate change negotiations. It holds to the fact that since the developing nations are the main emitters of GHGs, they must commit themselves into stabilizing and reducing their emissions. In an attempt to commit itself to sustainable development, India has recently employed a National Action Plan on Climate Change. It has also been insisting at the UN Framework Convention on Climate Change and other global conferences to execute mutual development of harmless technologies which are friendly to the environment.

India has also put efforts to electrify upon developed nations to harness environmental cleaner energy and sound technologies into restricted public sphere for use by emerging economies for early adoption, transmission and deployment along with relocation of financial capital. India has ventured into Adaptation Fund and Special Climate Change Fund under the UN structure. With the accelerating economic situation in India, the government has seen the need to incorporate climate change programs into their framework for sustainable development. India’s national adherence to this global problem enables it to stand a better position of contending with future climatic constrains that may erupt to affect economic growth.

As developing economy, China is at the stake of increasing global warming through intensive emissions of GHGs. It has currently been the largest carbon dioxide emitter, having generated 6028 Mt of carbon dioxide in 2007 which amount to a fifth of global total emission and overtaking U.S. for the first time. Statistics showed that by 2007, China’s per capita carbon dioxide emissions level rose by 80% from 1998 to 2007. Carbon intensity per GDP was at 2.52kg CO2 per one U.S dollar in 2007.

In response to this condition, China has launched climatic policies to arrest and possibly enhance the ever rising problem of climate which may poses a major threat to its future economic developments and aspirations. Some of the major policies include the National Climate Program which was launched in 2007 and Actions for Addressing Climate Change enacted in 2008. These policies are aimed at operating with primary concerns of overriding the significance of economic growth.

In 2009, China established the Tianjin Climate Exchange as a formal swap for trading counterbalance credits. This initiative was approved by the state to promote regional development in order to incorporate the locals and private sector into campaigns for positive climate actions. Business community has recently ventured heavily into programs addressing climate changes as they provide business opportunity. Recent positive engagement includes the participation of a business delegation in China as an observer in Copenhagen summit. In 2009, the delegation enacted the Chinese Business Copenhagen Declaration, which addressed the economic requirements of the country before adopting an acceptance of actions and responsibilities on climate. It also promotes the States 2020 carbon intensity goal that is targeted on reducing the level of carbon emissions.

Prospects to turn environmental costs to business profits have led to recent positive response to climate issues. Regulatory restrictions that CDM projects in the country are only eligible for Chinese holding and Chinese-funded enterprises have further enhanced domestic investment. Attractive economic incentives and provisions are playing a major role in involving the government and business sector in the global project on climate. This move enables China to stand a chance of propagating further economic growth along with adequate emphasis on climate change, in order to create sustainable economic development which has a key contribution to its emergence as world’s economic giant by 2050.

This section of the paper discusses energy consumption in China and India relative to Gross Domestic Product (GDP) and how it is projected to be in the future.

India holds a sixth of the world’s population but its energy consumption is about 5% of the world’s total energy consumption. This shows that there is tremendous potential for increasing demand in India. Energy intensity is a measure of the energy needed to produce one unit of GDP while energy elasticity is the ratio of growth rate of primary energy demand and GDP. These measures depend on different factors such as the level of development in different regions of the country, climatic conditions together with available domestic energy sources.

India’s energy intensity is at 0.69, which is a little lower than that of China which stands at 0.78, but it is much higher than that of the European Union at 0.13. This is as a result of low energy efficiency, highly subsidized energy prices as well as energy intensive industries, such as the steel industry in India which ranks seventh in the world. Development of the residential sector which uses a lot of non-commercial energy, e.g. wood will bring a great change in the energy intensity.

Table 1: Key energy indicators for India.

With increasing rise in GDP per capita, India has enormous potential for energy demand growth. However, this is not without its challenges because though India is well endowed with resources such as coal, most of them are of low quality. Its gas and oil reserves are in short supply. There is hope for renewable energy, but its use is very limited today. India is largely an importer of energy, mostly oil. According to the International Energy Agency, in 2005, India imported around 70% of its crude oil requirements and consumed about 3% of the world’s oil supply.

India is the world’s third largest coal user, after China and the United States, due to its high ranking steel industry. It is also the world’s third largest coal producer, after China and the United States, and in 2005 had an output of 262 Mtce. In the same year, coal demand was 297 Mtce, so around 35 Mtce was imported. With domestic production flat for over a decade, India’s crude oil imports have increased from 44% in 1990 to around 70% in 2005. Recently, a small fraction of the imported crude oil is exported as refined products, thus this also contributes to GDP. India’s energy intensity has decreased significantly since 1980 due to the growing share of the services sectors in GDP.