China has overtaken the United States as the wealthiest nation in the world, according to a new report from the global management consulting firm McKinsey and Company released Monday. Researchers at McKinsey and Co. analyzed national wealth according to a nation’s net worth.
The group’s analysis showed that China’s net worth soared from $7 trillion to $120 trillion between 2000 and 2020. The United States net worth, on the other hand, only doubled over the same period to $90 trillion.
“We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic,” the report explained. “This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value.”
“Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds,” the report continued.
Worldwide net worth increased from $160 trillion in 2000 to $510 trillion by 2020. Among the countries listed in the study, the average per capita net worth was $66,000, with “large variations” present across economies, and “even more so across households within an economy.” Per capita net worth ranged from $46,000 in Mexico to $351,000 in Australia.
“We are now wealthier than we have ever been,” said Jan Mischke, a partner at the McKinsey Global Institute in Zurich, according to Bloomberg.
Researchers also found that in both the U.S. and China, over two-thirds of the wealth comes from the richest 10 percent of households, and their share of the wealth continues to rise.
McKinsey’s report stated that 68 percent of global net worth is held in real estate, with the remaining found in things like infrastructure, machinery and equipment, as well as “intangible assets” like intellectual property and patents.
“These findings raise important questions for policy makers and business leaders. Foremost among them: is the global economy undergoing a paradigm shift as the world finds new sources of wealth? What might some of those new stores of value be? Or are we at risk of reversion to the historic mean that could result in a decline in net worth? And what will it take to rebalance the global economy?” the report asked.