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China beats the United States to become World’s richest country

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Back in the 2000s, the richest men were in Millions of dollars. But in the 2020s, the richest men are worth Billions of dollars. Simply put, the world is richer than it was back in the 2000s. However, this does not mean that majority of the people of the planet is richer. This also means that the richest country in the 2000s is no longer the richest now.

A new global financial data released by McKinsey & Co., and reported by Bloomberg has confirmed that China has overtaken the United States to become the richest country in the world. China is currently enjoying one-third of the world’s net worth.

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In the tech atmosphere, Elon Musk and Jeff Bezos are still top of the world. And no doubt, science and engineering are generating more money that before. In Bloomberg report, Jan Mischke, a McKinsey partner said, “We are now wealthier than we have ever been”.

So many things have changed over the past years. Including some specializations and skills. Countries who are popular in such outdated specializations are now pushed down the wealth ladder. While countries with the latest needed specializations are climbing up same ladder.

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According to the report, the world’s net worth rose to about $514 trillion in 2020. It’s a tremendous growth considering the net worth was just $156 trillion in 2000. But more interestingly, China’s net worth rose to $120 trillion from $7 trillion in 2000. The countries current net worth is about one-third of the world’s net worth in 2020.

The net worth of the United States is $90 trillion which is double what the country had in 2000 but still trails behind China by $30 trillion.

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Why the Increase in Net Worth

The United States and China have the largest markets or economies in the world. But from the report, only 10% of households grabs the lion’s share of the world’s wealth.

As for other niches, 68% of the global net worth comes from real estate. The increase in global gross domestic product as well as skyrocketing property prices over the past two decades is another reason for increase in net worth.

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As Jan Mischke puts it, there are serious concerns over the pattern of why the global net worth increased. He laid emphasis on the high real estate prices. He said, “Net worth via price increases above and beyond inflation is questionable in so many ways. It comes with all kinds of side effects.”

Put simply, with the rise in real estate prices, many people have to borrow in order to buy houses. And this also increases the risk of a financial crisis, similar to the one in 2008.

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