China Topples U.S as The World’s Richest Country, Net Worth Jumps 1,614 Percent in 20 Years

China, the world’s most populous nation, has emerged as the world’s richest nation ahead of the United States of America, according to the latest report by McKinsey & Co.

China’s net worth jumped by 1,614.3 percent from $7 trillion in 2000 to $120 trillion in 2020, accounting for one-third of the global net worth of $514 trillion. The U.S net worth was held back by its slow increase in property prices, still, the country managed to double its net worth to $90 trillion during the period under review.

The world’s total net worth grew by 229.5 percent from $156 trillion in 2000 to $514 trillion in 2020. Meaning, the world is now richer than ever even with the rising poverty rate.

“We are now wealthier than we have ever been,” said Jan Mischke, a partner at the McKinsey Global Institute in Zurich.

In the two largest economies, more than two-thirds of the wealth is held by the richest ten percent of households, and their share has been increasing.

The report also noted that 68 percent of the global net worth is stored or held in real estate while the remaining are held in infrastructure, machinery and equipment and, to a much lesser extent, so-called intangibles like intellectual property patents. This explained why global wealth outstrips the global Gross Domestic Product (GDP).

“Financial assets such as equities, bonds, and derivatives grew from 8.5 to 12 times GDP. As asset prices rose, almost $2 in debt and about $4 in total liabilities including debt was created for every $1 in net new investment,” the report stated.

“The country variations were wide, with the amount of debt created for each $1 in net new investment ranging from just over $1 in China to nearly $5 in the United Kingdom.”

The report analysed balance sheets of 10 countries that accounted for 60 percent of global wealth, other countries reviewed were Germany, France, UK, Japan, Sweden, Mexico, Canada and Australia.