"Global Assets Triple Over 20 Years... China Surpasses US to Take 1st Place"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] While global assets have more than tripled over the past 20 years, China has surpassed the United States to take the top spot in asset growth.

Bloomberg News cited a McKinsey report on the 15th (local time), stating that "the top 10 countries account for more than 60% of global income." The 10 countries are China, the United States, Germany, France, the United Kingdom, Canada, Australia, Japan, Mexico, and Sweden.

Global net assets surged from $156 trillion in 2000 to $514 trillion in 2020, more than tripling. The report explained, "One-third of the increased assets belong to China," adding, "China's assets skyrocketed from $7 trillion to $120 trillion during the same period."

U.S. assets more than doubled during the same period, reaching $90 trillion. The report said, "Both the U.S. and China have the top 10% holding two-thirds of total assets," and "their share is steadily increasing."

According to McKinsey, 68% of global assets are related to real estate. Assets are tied up in residential real estate, commercial real estate, and state-owned land, among others.

The rapid increase in global asset size over the past 20 years exceeds the growth in global GDP. McKinsey analyzed that "this was influenced by rising real estate prices due to interest rate cuts." It added, "The price of these assets increased by 50% relative to long-term income," raising questions about the sustainability of the asset boom.

Bloomberg News warned, "As real estate assets rise, many people are unable to own homes, increasing the risk of a financial crisis," and cautioned that "China could potentially face a crisis similar to that faced by Evergrande Group."

The institute stated that it is ideal for global assets to be used for more efficient investments to expand global GDP. The McKinsey Institute said, "If asset prices collapse, more than one-third of the world's wealth could disappear."

This content was produced with the assistance of AI translation services.