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China Overtakes US to Grab No. 1 Spot In Global Wealth List

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Global wealth tripled over the last two decades. Among the leaders, China overtook the US and claimed the top spot in gains.

This revelation is part of the report issued by McKinsey & Co in 2021. It examined the national balance sheets of ten countries that hold 60% of the world’s wealth. 

RELATED: US Outpaces China in Economic Growth

Global Wealth Went From $156T in 2000 to $514T in 2020

Globe map sign over many american dollar bank notes-Global Wealth

According to Jan Mischke, partner at the McKinley Global Institute, the world is increasingly getting richer. “We are now wealthier than we have ever been,” Mischke said.

The world’s net worth totaled $514 trillion in 2020. This is three times more than the $156 trillion total in 2000. 

Among the world’s wealthiest, China accounted for almost one-third of the gains. From a mere $7 trillion in 2000, the country’s wealth surged to $120 in a span of twenty years.

During the time, China joined the World Trade Organization, which boosted its economic ascent. 

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Richest 10% Controls 60% Of Global Wealth

Meanwhile, the US also managed to double its wealth. Due to a slower increase in property prices, the country’s net worth doubled from $40 trillion to $90 trillion in the same period.

In both the US and China, which are the world’s biggest economies, the richest 10% of households hold two-thirds of their wealth. This share continues to increase. 

McKinsey also computed that around 68% of global wealth is in the form of real estate. The remainder consists of infrastructure, machinery, and equipment.

To a much lesser extent, the balance belongs to intangibles such as intellectual property and patents. McKinley did not count financial assets in global wealth calculations.

These are assets that are usually offset by liabilities. An investor holding a corporate bond means holding an IOU from that company. 

Global Wealth Rose Steeply Over the Last 20 Years

The $358 trillion increase in global wealth between 2000 and 2020 outpaced the growth in global gross domestic product. The wealth gain owes its rise to surging property prices as well as declining interest rates.

McKinley found out that asset prices are nearly 50% above their long-run average relative to income. This development raises questions about the sustainability of the recent wealth boom.

“Net worth via price increases above and beyond inflation is questionable in so many ways. It comes with all kinds of side effects,” Mischke said. 

In fact, ballooning real estate prices can increase the risk of another financial crisis. Once property prices become too high, many won’t be able to afford it.

This is what happened during the 2008 crisis when the US housing bubble burst. China risks a similar scenario as one of its major developers, the China Evergrande Group, is running into debt. 

Global Wealth Should Go Into Productive Investments

The McKinsey report recommends an ideal resolution to avoid another bubble. Global wealth should find itself invested in productive enterprises that increase GDP.

Otherwise, a single collapse in asset prices such as real estate can wipe out as much as a third of the global wealth. This will bring it more in line with the current world’s income.

Watch the Yahoo Finance video reporting that global wealth soared to an all-time high of $250 trillion in 2020:

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What do you think about global wealth ballooning from $156 trillion in 2000 to $514 trillion in 2020? Do you agree that this is an unsustainable growth that can collapse at any time?

Let us know what you think. Share your comments below.

5 Comments

5 Comments

  • i The professor says:

    CommunistChina can go to hell as far as I’m concerned….. when is our government going to grow a pair of balls and make China pay for what they’ve done to us as far as the virus and tons of ingredients for fentanyl being shipped through Mexico to the United States ….. but no we keep dealing with China buying China products they are communists doesn’t our government get it they are communists ….they’re laughing all the way to the bank at us for being so naïve and weak….. under sleepy Joe we have become a weak nation….if you lost a loved one to this virus Communist China is to blame remember that…..it’s sickens me when I see sleepy Joe shaking hands or having a drink with China’s leader it’s really sickening

  • BBA says:

    China is very smart whereas we here in the US are very lazy not paying attention fools. We let China pretty much buy us out with there cheap labor and goods. We allow illegals to flood into this country and work under the table at occupations that used to all be held by blue collar Americans. The problem with that is as soon as they trespass into our country they sign up for all of our social safety nets that generations of Americans have paid into and they have not. Unless more Americans will gain back some National pride and stop making China richer and more powerful by the day I only see this country falling off of the cliff of Independence in the near future and we will either fight to keep our homeland or turnover the government to China. As of now I do not feel even remotely confident in saying we have enough patriots under the age of 50 that are willing to fight for their freedom!!

  • Natalie says:

    If the global wealth is so high, then why is the ppl not getting anything out of it.
    Our Government better start thinking about us instead of spending on the damn Illegals, they are illegals and we’ve been citizens for years. When do we get our fair share. China already owns us.!!!!!!

  • JOEL K GOODMAN says:

    FKK JOE BIDEN IS A TOTAL INCOMPETANT FOOL, IN ADDITION TO BE AS CROOKED AS A DOG’S HIND LEG. BOTH HE AND HID DRUG ADDLED SON BELONG IN LEAVENWORTH FOR LIFE.WHY DOES OUT JUSTICE DEPARTMENT BURY ALL THE INFO FROM HUNTER BIDEN’S COMPUTER? MAYBE THE JUSTICE DEPARTMENT AND FBI NEED TO BE IMPRISONED ALSO/

  • The professor says:

    …. and inclosing … Ronald Reagan … Gorbachev tear down that wall …. Donald Trump … we’re gonna build a wall to protect our borders ….. Joe Biden … when I’m in the swimming pool I like when kids come up and touch my legs !!!

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