China’s Global Wealth Effect
02 December 2020
China’s Global Wealth Effect
China has helped make the world more ”equal”
The top chart, courtesy of Max Roser of Our World in Data, shows how global income distribution has translated to the right, towards a more normal distribution, implying higher income equality.
- The shift has clearly been more marked in the last half century than in the previous 150 years.
- Looking at the individual components, the engine behind this shift has been the spectacular growth in China.
China is the new middle class
The bottom chart, from Credit Swiss Global Wealth Report, shows how wealth is distributed across the main economic regions.
- The U.S. and Europe are clearly skewed towards the high deciles.
- China and India are the “biggest”, reflecting population numbers.
- China clearly dominates the upper-middle class area.
An ongoing shift with more to go?
China wealth increased significantly over the past 50 years, reflecting the strong growth of its economy, and its transformation from an agricultural to an industrial country.
- If the ongoing transformation from a basic industrial economy to an advanced high-tech society brings a similar effect, will China end-up replacing Europe and the U.S. in the top global wealth decile?
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