Not the US, it is China now the World’s richest nation: Report

According to a report authored by the research wing of McKinsey & Co, China leading the way and overtaking the U.S. for the top spot worldwide. The report said that global wealth had tripled over the last two decades. The number has been seen from $156 trillion in the year 2000 to $514 trillion in 2020, Bloomberg reported. As a result, China has been seen as the world’s richest nation overtaking the US.

The report was submitted after a detailed checkup of national balance sheets of ten countries that represented 60 percent of world income were analyzed. China accounts for about a third of the increase in net worth worldwide. Just before joining the World Trade Organization, its wealth increased from $ 7 trillion to $ 120 trillion in 2000, accelerating its economic growth.

In China and the US, more than 67% of wealth is owned by the wealthy 10% of households. Later there occurred an increase in the proportion of wealth ownership in these countries.

According to the report,  68% of global net worth is stored in real estate. A balance is maintained between infrastructure, machinery, equipment, and so-called invisible things, such as intellectual property and patents. However, in the calculation of global wealth, financial assets have not been taken into account as they are offset by liabilities. 

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McKinsey & Co. reports that the sharp rise in net profit over the past two decades has outpaced the rise in global GDP(gross domestic product). Also, the net profit accelerated massive property prices as a result of lower interest rates. “Net worth via price increases above and beyond inflation is questionable in so many ways,” Mischke said. “It comes with all kinds of side effects.”

Although China has been found as the richest nation, the report also states that China’s economy risks being plagued by property debt. So to take precautionary measures to overcome the crisis, ensuring productive investments that contribute to global GDP is the best choice.