China is on path to become the world's second-wealthiest country after the United States with total fortune expected to reach US$40 trillion by 2016, Credit Suisse AG said in a report released yesterday.
Japan is currently the No 2 wealthiest state, but its stagnant economy ever since the 1990s has caused its gross wealth on a continuous comparative wane. China, which has surpassed Japan as the world's second-biggest economy, will soon catch up with its neighbor in terms of total wealth.
But, there exists an alarmingly big wealth divide in the rapidly growing China, the Credit Suisse report said.
The country’s accumulation of fortune will be achieved along with an expanding wealth gap where the Gini coefficient, a commonly used gauge of wealth inequality in a country, has reached a dangerous level, said the report.
Overall wealth at the hands of Chinese mainlanders is projected to reach US$39 trillion in the coming five years, Credit Suisse AG said in its annual Global Wealth Report.
China now has a total wealth of US$20 trillion, third in the world behind only the US and Japan but ahead of France, according to the report, which analyzes the wealth distribution in more than 200 countries.
Total fortune in China increased by US$4 trillion from January 2010 to June 2011, and is the second-highest contributor of global wealth growth after the US, the report said.
Wealth per adult in China has more than tripled from US$6,000 in 2000 to US$21,000 this year, the report said.
The report said that 37 percent of the adult population belongs to the middle-class bracket of the wealth pyramid with a fortune of US$10,000 to US$100,000 each, while about 6 percent of the adult population falls below US$1,000. And, 2.3 percent of them own per-capita wealth at more than US$100,000.
With the increasing wealth in the hands of successful entrepreneurs, professionals and investors, inequality has been rising quickly, the report cautioned.
So far this year, China has gained more than a million millionaires for the first time and now has more than 5,000 ultra-high net worth individuals with average fortunes above US$50 million, just behind the US, the report said.
The Gini coefficient in China reached 0.5 last year after hitting the recognized warning level of 0.4 more than 10 years ago, according to a report by Xinhua news agency last year. Developed European nations and Canada tend to have Gini indices between 0.24 and 0.36, which is believed healthy.
A low Gini coefficient indicates a more equal distribution, with 0 corresponding to complete equality, while higher Gini coefficients indicate more unequal distribution, with 1 corresponding to complete inequality.
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