China has exceeded the United States to become the richest nation in the world as global wealth tripled over the past two decades. A new report by the research arm of consultants McKinsey & Co. examines the national balance sheets of ten countries representing more than 60% of world income.
According to the reports, the net worth worldwide rose to $514 trillion in 2020, from $156 trillion in 2000, according to the study. China accounted for almost one-third of the increase. Its wealth skyrocketed to $120 trillion from a mere $7 trillion in 2000, the year before it joined the World Trade Organization, speeding its economic ascent.
China’s wealth jumped to $120 trillion in 2020 from just $7 trillion in 2000. This marks a jump of $113 trillion in 20 years, helping the nation surpass the United States in terms of net worth. During the same period, the US saw its net worth more than double to $90 trillion. However, the nation could not beat China due to muted increases in property prices.
The report further added that in both countries the world’s biggest economies — more than two-thirds of the wealth is held by the richest 10% of households, and their share has been increasing. Around 68% of global net worth is stored in real estate. The balance is held in such things as infrastructure, machinery and equipment and, to a much lesser extent, so-called intangibles like intellectual property and patents.
Financial assets are not counted in the global wealth calculations because they are effectively offset by liabilities: A corporate bond held by an individual investor, for instance, represents an I.O.U. by that company.
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