China Likely to be Second Wealthiest Country by 2016
In its recent Global Wealth Report, Credit Suisse AG recently revealed that at the rate China’s economy is expanding it is expected to become the world’s second wealthiest country by 2016, with a forecast fortune totaling as much as US$39 trillion. The United States is expected to retain its top spot, while Japan is likely to be relegated to third place in the global wealth stakes. China has already passed Japan as the second largest economy in the world, but within five years it is expected to surpass its level of wealth as well. The fourth wealthiest country is France.
According to the report, the average adult’s wealth in China has more than tripled, rising from around US$ 6,000 in the year 2000, to US $21,000 in 2011. It was noted, however, that the wealth remains with the already wealthy in China, with the gap between the rich and poor continuing to grow. This is highlighted by the diminishing middle class, the majority of which, through various circumstances, are joining the ranks of the poor rather than climbing to the ranks of the wealthy. Around thirty percent of the adult population falls within the middle segment of the wealth scale. Using the Gini coefficient index to measure the inequality of wealth, it was determined that China’s gap between the rich and poor has already passed a level deemed to be dangerous. Developed by sociologist and statistician Corrado Gini of Italy, the Gini coefficient is used to measure inequalities in a number of disciplines including sociology, health science, engineering, agriculture, ecology, and economics.
Much of the additional wealth is coming from the success of entrepreneurs, with China reporting more than a million millionaires, and more than 5,000 individuals having personal fortunes exceeding US$50 million. Using a scale of wealth per adult, rather than total wealth of the country, Switzerland, Australia and Norway are in the top three richest nations, with China not found in the top 10. However, with China’s population exceeding 1.3 billion people its total wealth will exceed countries with a lower population. Switzerland’s average wealth per adult is recorded as US$540,010 and is the only country with a reading of over half a million dollars.