QUANTUM LEAP BY CHINA AS WORLD'S WEALTHIEST COUNTRY

           

Following the sharp rise in wealth for the past two decades China has finally overwhelmed US as the wealthiest country in the world according to the new report by the research arm of the consultants McKensey & Co. The report has been prepared after examining the balance sheet of 10 countries representing 60© of world income. The worldwide networth rose to $514 trillion in 2020 from $156 trillion in 2000, as per the report. China's wealth jumped to $120 trillion in 2020 from $7 trillion in 2000. During this period US have doubled its networth to $90 trillion.  Due to muted increase in price of the property US could not best China. It is to be noted that more than two thirds of the wealth is held by 10% of the households of both US and China.

It is also reported that 68% of the global networth is held in the form of real estate  and the remaining are mainly in infrastructure, machinary and equipments. Intangible assets like intellectual property, patent rights etc are also held by some.

It is also mentioned that financial assets are not included in the global asset reports as they are effectively offset by liabilities. The report further stated that increase in the global GDP and the declining interest rate has skyrocketed the property price the world over. The high increase in prices of real estate have sent away many from buying houses in US and looked for taking loans for house. In the case of China, most of the housing properties are accumulated by a few rich and pegged up the price very high. This could be a reason for the sharp increase in networth of assets in China.

(Indebted to the report of India Today dated 16 November 2021)

K V George