China has overtaken the US as the nation which has amassed the biggest net worth as global wealth surges, a fresh report by McKinsey & Co suggests.
China’s wealth skyrocketed over the past two decades, the consulting company said according to Bloomberg, explaining that its net worth increased by a whopping 17 times from $7 trillion in 2000 to $120 trillion in 2020.
China accounted for approximately one-third of global net wealth growth over the same period. China joined in 2000 the World Trade Organization to accelerate its economic rise.
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Over the same period, America saw its wealth increase by a third. McKinsey states that Washington was forced to be replaced by Beijing in the top 10 richest nations list, as its net worth reached $90 trillion for 2020.
The report stated that more than half of all wealth in both countries is concentrated within the 10% richest households.
Global wealth totaled $514 trillion by 2020, an increase of $156 trillion from 2000.
Some 68% of this wealth is stored in real estate, McKinsey said, adding that its fast growth surpassed the increase of the world’s GDP over the same period. According to McKinsey, global wealth has risen due to rising property prices. However, it warned that the escalating real estate market might not be sustainable.
McKinsey suggested that rising prices may make it difficult for some people to purchase residential properties. He also said that there could be a financial crisis like the one in 2008 that resulted from the collapse of America’s housing bubble. Due to its debt to property developers, this could also affect China.
The consultancy firm said that a collapse of asset values could cause as much as a third to disappear from the world’s wealth.
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