China accounted for 50 percent of the global growth in net worth, while US accounted for 22 percent.
China surpassed United States in wealth acquisition during the period 2000 to 2020, states a recent report by the global consulting firm McKinsey & Co. It added that China accounted for 50 per cent of net worth globally during the mentioned period. The report examined the national balance sheets of ten countries that constitute more than 60 per cent of the world income. In the last two decades, US has accounted for 22 percent of the growth in net worth.
The global balance sheet and net worth more than tripled between 2000 and 2020. Whilst, the assets grew from $440 trillion, or about 13.2 times GDP in 2000 to $1,540 trillion in 2020, the net worth grew from $160 trillion to $510 trillion.
Although, there were large variations existing across economies, average per capita net worth remained around $66,000. While the net worth ranged from 4.3 times of the GDP in the United States, it was around 8.2 times of the GDP in China.
The contemporary economy has been increasingly propelled by intangible assets like software and other intellectual property, the report stated. Thus, several savings struggle to find investments offering sufficient economic returns and lasting value to investors. These savings mostly got diverted into investments like real estate, which accounted for nearly two-thirds of net worth in 2020. Other fixed assets with the potential of driving economic growth made up only about 20 per cent the total.
The top 10 per cent of household accounts in China and United States held nearly two-thirds of the wealth in the two countries. The report informs that in the United States, wealth held by top ten per cent of households increased from 67 per cent in 2000 to 71 per cent in 2019. The share for the bottom 50 per cent dropped from 1.8 per cent in 2000 to 1.5 per cent in 2019.
As for China, the top ten per cent of households owned 48 per cent of the nation’s wealth in 2000. This spiked to 67 per cent in 2015. The bottom 50 percent of Chinese households owned 14 percent of wealth in 2000 and 6 percent in 2015.