Working Age Population in Thousands

Although the World Bank projects the Chinese economy will grow by more than 8 percent in 2013, developers may find better bets in India and some other Asian countries over the next 20 years, according to a report from Hong Kong-based Global Demographics. The report, “Tomorrow’s Asia: Some Beliefs Challenged,” suggests that Japan’s decline and China’s growth prospects may be overestimated. These findings and others were reviewed in a webinar presented by ULI Asia Pacific.

For example, the report shows negative demographic trends for Japan and China. Japan’s workforce is forecast to decline by 3.3 percent by 2022, and China’s workforce will decline by 6.5 percent. A much larger country than Japan, China’s absolute numbers are also larger, with almost 50 million people expected to drop out of the workforce. However, the situation is reversed in India with a 15.3 percent increase in employed persons forecast over the next decade.

“India, in some ways, is a better investment than China, even though China’s a bigger market,” says Clint R. Laurent, Chief Executive Officer of Global Demographics. “Housing demand in China will go up but it could be a bumpy ride,” he says.

asia_chart3_opt“The number of households earning more than U.S. $50,000 should go up by about 1.5 million per annum,” Laurent says. “You could see the property market in India accelerate.”

Other findings in the report include:

  • India’s workforce is less educated than China’s, but improving. Only 24 percent of India’s workforce had completed a secondary education in 2012. By 2032, that will double to 49 percent.
  • Compared with India, China’s workforce is closer to peak in terms of female workers, rural-to-urban migration, and working-age population.
  • Other Asian markets offer strong potential for growth, says Laurent. These include South Korea, Taiwan, Indonesia, Thailand, and Malaysia.

Even though there have been reports of China’s housing market becoming overheated, Laurent’s data show that consumers in China only spend about 5 percent of their income on housing. “The huge growth that’s taken place in China, in terms of consumption markets, to some extent is being fronted by the under-valuing or under-costing of housing,” says Laurent.