China overtakes US to become world's richest nation as global wealth triples in last two decades

China has gone past the US to become the richest nation in the world, according to a new research report. The report, authored by the research wing of McKinsey & Co, said that global wealth had tripled over the last two decades, from $156 trillion in the year 2000 to $514 trillion in 2020.

According to the data revealed, China has accounted for almost one-third of the staggering rise in global wealth. The wealth of the nation surged from $7 trillion in the year 2000 to $120 trillion in 2020. The data tracks the period from one year before the country became a member of the World Trade Organisation (WTO), which speeded up the rise of its economy.

The report analysed the national balance sheets of 10 countries, which accounted for over 60 percent of the world's income. Apart from China and US, the countries in the report included Germany, France, UK, Japan, Sweden, Mexico, Canada and Australia.

As for the US, the net worth of the country increased to almost $90 trillion in two decades. In both US and China, the two biggest global economies, more than two-thirds of the wealth is concentrated in just 10 percent of the richest households. About 68 percent of the global net worth is stored in real estate, as per the report.

The surge in net worth has been led in part by rising property prices, making the net worth outstrip the rise in global gross domestic product. The rise in real-state prices can increase the risk of a financial crisis, like the one that occurred in 2008 after the US housing bubble burst.

As per news reports, the debt of Chinese property developers such as the Evergrande Group can lead the country into a similar crisis.

What is the Evergrande Group crisis?

The Evergrande Group has recently been struggling with over $300 billion in liabilities. The company, which is the most indebted of China’s private homebuilders, has ignited fears worldwide of a global financial crisis.

Recently, another Chinese real estate company, Fantasia Holdings, failed to repay a loan worth $205.7 million, according to news reports.