Global wealth has increased three times in the past twenty years. There is a new country that leads the world in wealth. China has finally overtaken the U.S. and is now the country that has the most wealth in the world, according to a report by Bloomberg | Quint.
The research arm of McKinsey & Co., a global consultant firm, examined the balance sheets of ten countries around the world. These national balance sheets represented over 60 percent of the income in the world.
The study reported that the net worth around the world has increased to $514 trillion. It was $156 trillion in 2000. It also stated that China’s wealth showed the largest increase and stood at $120 trillion. In 2000, it was $7 trillion. China joined the World Trade Organization (WTO) in 2001 and its wealth increased exponentially.
In the past twenty years, the U.S. saw a less dramatic growth. Property prices did not increase as much as in China. However, the net worth of the nation doubled during this period and is now at a value of $90 trillion.
The report also highlighted what social scientists have been saying about the rich getting richer. In both of the world’s largest economies more than 67 percent of the country’s wealth was held by 10 percent of the households. It also said that their share had been increasing.
The report by McKinsey also noted that real estate accounted for a large chunk of the global net worth. It said that 68 percent of the world’s wealth was in real estate assets. The remaining 32 percent was divided into various other assets including tangibles and non tangibles such as
infrastructure
machinery and equipment
intellectual property and patents.
The report also said that surging real estate values could increase the risk of a financial crisis. It suggested that productive investments that expanded the global GDP would be an ideal resolution for the world’s wealth to remain sustainable and not collapse in a worst case scenario.
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