China Is Now The Richest Nation, Passing The US

According to a recent economic study of the world’s wealthiest nations’ “national balance sheets,” China has surpassed the United States as the world’s wealthiest nation. Over the last two decades, China’s worldwide wealth has exploded, and it currently accounts for 20% of global GDP, up from 15% in 1990.

China’s net worth increased from $7 trillion to $120 trillion between 2000 and 2020, accounting for one-third of the worldwide growth. Meanwhile, the United States’ net wealth has merely doubled in the same time frame, reaching $90 trillion in 2020. The information was revealed in a new McKinsey report titled “The Rise and Rise of the Global Balance Sheet.”

Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States are all included in the World Bank’s newest assessment on the status of the world economy, which looks at the balance sheets of ten nations that account for more than 60% of global revenue.

It calculates net value using tangible assets and ignores financial assets, stating that liabilities effectively counter them. According to Bloomberg News, “a corporate bond owned by an individual investor, for example, constitutes an IOU by that business.”

With a nominal GDP of more than $21 trillion, the United States far outpaces China in second place. However, McKinsey’s latest study claims that GDP only tells half of the picture, claiming that there has been a significant “divergence” between net worth and GDP over the previous 20 years. When it comes to GDP per capita, the United States ($65,298) surpasses China ($10,262) once more, although not as much as when it comes to absolute wealth.

According to University of Michigan academics, financial assets and liabilities held outside the banking sector have increased substantially faster than GDP since 2000. The paper examines China’s economic growth since entering the World Trade Organization in 2001 and the impact of the United States’ national debt on the country’s real asset net value.