China overtakes US to become richest nation in the world: report

China overtakes US to become richest nation in the world: report

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In the past few decades, China has achieved tremendous economic growth, pushing the world’s largest country into the richest country, and leaving behind its archenemy, the United States.

A report by McKinsey Consulting’s research department concluded that China ranks among the top 10 countries whose income accounts for more than 60% of the world’s income.

China tops the list of the richest countries in the world, mainly because it has gained nearly one-third of the world’s net wealth in the past two decades.

“We are now richer than ever before,” Jan Mischke, a partner at the McKinsey Global Institute in Zurich, said in an interview.

According to the study, global net wealth has increased from US$156 trillion in 2000 to US$514 trillion in 2020. The study pointed out that China accounts for almost one-third of this net wealth. The report shows that the country’s wealth has soared from US$7 trillion in 2000 to US$120 trillion.

Nearly 20 years ago, China promoted economic development after joining the World Trade Organization.

However, the net wealth of the United States has increased to more than US$90 trillion, and real estate prices have risen more moderately.

The report shows that more than two-thirds of the world’s wealth is in the hands of 10% of the world’s elites.

According to a McKinsey report, 68% of global net wealth can be attributed to real estate.

According to a report by Bloomberg, soaring real estate prices may make it difficult for many people around the world to afford housing, which may lead to an economic crisis.

“Surging real-estate values can make home ownership unaffordable for many people and increase the risk of a financial crisis — like the one that hit the US in 2008 after a housing bubble burst,” states the report. “China could potentially run into similar trouble over the debt of property developers like China Evergrande Group.”

The McKinsey report said the ideal resolution to this problem would be for an increase in more productive investments that would increase global GDP. 

“The nightmare scenario would be a collapse in asset prices that could erase as much as one-third of global wealth, bringing it more in line with world income,” stated the report. 

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