China now has the second largest household wealth total, overtaking Japan, according to new research by financial services company Credit Suisse.
The latest Wealth Report from the Zurich-based firm also found that China now has the world’s largest middle class, with 109 million citizens owning wealth of between US$50,000 and US$500,000.
Although the country’s assets have been growing an astonishing rate, however, it still punches below its weight on a per capita basis: with roughly one-fifth of the world’s population, China now holds about ten percent of global wealth.
Based on the study’s definition of wealth, the US now has more poor people than China.
Americans account for about one-tenth of the world’s poorest people, while Chinese account for virtually none. This is because the study measures net wealth, defined as the value of all assets minus the value of all debts.
With most Americans undertaking mortgages, student loans and other forms of debt, a Chinese person with just RMB100 in his pocket is wealthier than a quarter of Americans, by Credit Suisse’s assessment.
The Wealth Report makes no allowances of negative wealth, which is also possible in countries with relatively advanced banking and financial institutes. Also overlooked by the definitions used by Credit Suisse are the values of human capital and the social security benefits offered by developed welfare states.
The Wealth Report also found that one percent of the world’s population now controls half the planet’s wealth. “Wealth inequality has continued to increase since 2008, with the top percentile of wealth holders now owning 50.4 percent of all household wealth,” it reads. The poorest half, meanwhile, own just one percent.
According to the Wealth Report statistics, just over 70 percent of the global adult population – about 3.4 million people – own wealth of less than US$10,000. Twenty percent – about a billion people – are in the US$10,000-100,000 range and the remaining eight per cent – 383 million people – own more than US$100,000. Owning just US$3,210 would get you into the wealthiest 50 percent.
In 2014, China scored 0.469 on the Gini inequality index, well above the international warning line. In spite of its hundreds of USD billionaires, the country is still home to 70 million people below the national poverty line.