We are living through a post-pandemic inflection point when it comes to the world’s two most populous countries. The long-term regional implication for international banks is significant but not what one might think. 

In Hong Kong in the early 2010s, financial industry banter tended to focus on when Shanghai would join New York and London as one of the world’s three key financial centers. 

Those were the halcyon days when investment bankers basked in the throes of China’s growing economy, doing deal after deal after deal in an increasingly liberal economy. Mumbai wasn’t a twinkle in any financier’s eye – like anywhere.

Quicker than Expected

Fast-forward a decade or so and everything has seemingly been turned on its head. Not only has India overtaken China regarding the size of the population between the two countries, but a graphic by digital publisher Visual Capitalist, based on UN projections, forecasts that India’s could reach 1.7 billion by 2075, while China’s could fall to an even 1 billion.

This is something that appears to have taken many by surprise. The first forecasts that India might surpass China only go back to 2015-16 and even in 2019, it was not seen as that sure of a thing. 

Not What You Think

Certainly, no one in their right mind thought that the mainland’s populace could at some point in the foreseeable future end up being just 58 percent of India’s.

But here we are. The demographic implications for the financial industry are significant but not in the way most might think.

Won’t Fade Away

For one, China won’t just fade into the background as a forgotten economic backwater. The UN forecasts still hold that the two largest countries in the world will be the only ones to have at least 1 billion residents in 2075.

Moreover, no one else is likely to join them in that rarified club. Not only that, but other factors determine a potential future banking and market hub.

The Question of Where

Here Mumbai appears to fare less well, with much of the talk around 2020 being that it was losing the opportunity (collated Google search) to become one, well before the country had overtaken China in population. A KPMG UK report from 2020 even cites Mumbai as the least favorable of all India’s financial centers.

Another look at the graphic presents a much more tempered view. Looking at the financial industry from the point of view of population growth, we are apt to have several major comparatively equal nexuses in 2075.

The Magnificent Six

To wit, Nigeria’s population is expected to be almost a half billion, closely followed by Pakistan, with the US (389 million) continuing to be the leading light for the West, in front of Indonesia (316 million). 

To take a page from the global equity market’s tech and AI frenzied playbook, we could end up with a Magnificent Six of the world’s most populous countries driving growth and markets around the world.

Alpha and Beta

Given that, it could well be that the investment bankers of the future Alpha and Beta generation could be doing deals in the expected financial centers in Africa and Indonesia just as much as New York, India, and China.