Global Wealth Report: US in the lead, but China’s right behind

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10/19/2018 | 03:54 pm
Global wealth increased by $14 trillion last year. The U.S. came on top of the list, but it is not far from China, which ranked second in Credit Suisse's Global Wealth Report 2018.
In its latest report about global wealth published on October 18, Credit Suisse found that during the 12 months to mid-2018, aggregate global wealth increased by $14 trillion to $317 trillion, representing a growth rate of approximately 4.6 percent. This is lower than last year, but higher than the average growth rate since the start of the 2008 crisis.

Household wealth in the U.S. is continuing to see an "unbroken spell of wealth gains". Credit Suisse highlights a “seemingly relentless” rise in household wealth in the United States. Total wealth and wealth per adult in the United States have grown every year since 2008, even when total global wealth suffered a reversal in 2014 and 2015. "The United States continued its unbroken spell of wealth gains since the global financial crisis, adding another $6 trillion to the stock of global wealth," the report states.

However, China is creeping up, replacing Japan in second place. While the United States is still far ahead in terms of total household wealth and the number of citizens in the top wealth categories, China has made very quick progress to fil the gap between the two countries. “It is China, rather than the United States or Japan, to which much of the developing world looks for a model, inspiration, and often assistance, in wealth creation,” Credit Suisse notes. This century, total wealth in China has risen from $ 3.7 trillion to $51.9 trillion.

However, when it comes to wealth per adult, Switzerland and Australia lead the pack, with $530,240 and $411,060 respectively. The United States stands at $403,970. Since the turn of the century, wealth per adult in Switzerland has risen by 129%. The country has headed the global rankings every year. Most of the rise since 2000 has been due to appreciation of the Swiss franc against the US dollar. “Switzerland accounts for 1.8% of the top 1% of global wealth holders, which is remarkable for a country with just 0.1% of the world's population. Over 60% of Swiss adults have assets above USD 100,000, and 11% are US dollar millionaires.”
 

 
There is a strong imbalance in how wealth is distributed across the world. North America and Europe together account for 60% of total household wealth, but contain only 17% of the world adult population.

 
Global wealth is projected to rise by nearly 26% over the next five years, reaching $399 trillion by 2023. Emerging markets are responsible for a third of the growth, although they account for just 21% of current wealth.

 

 
 
The report also found that women’s share in wealth increased significantly over the 20th century and now reaches around 40 % of global wealth. This has been fueled by the lifestyle changes that have occurred over the past century. “Getting more education pursuing a career, combining employment with a family life – these are just some factors that have enabled women to enjoy greater financial independence, earn more, and save more as a result.”

There are of course some difference between regions of the world, with the women’s share of wealth in both Europe and North America estimated to be in the 40%–45% range, while recent studies for Africa and India indicate a significantly lower women's share, ranging between 20% and 30%. The wealth share in China is higher than in Africa or India, but below the level in Europe or North America. Credit Suisse estimates that the overall share of wealth of female adults in China is between 30% and 40%.
 
Romain Fournier
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