China to overtake US
China could overtake the US as the world’s wealthiest nation as early as next year when wealth is quantified by the accumulated value of the country’s built assets, the property and infrastructure which can be drawn on to fuel future growth, a new survey by consultancy firm EC Harris shows.
Rather than focusing on gross domestic product (GDP), the report highlights the productive potential of 30 economies across the world and how the balance of economic power is shifting as emerging economies continue to bridge the gap in accumulated wealth.
The Global Built-Asset Wealth Index illustrates the differences between 30 countries which represent 82 per cent of global GDP, and shows that total built-asset wealth within these countries stands at $193 trillion (€146 trillion) – the equivalent to almost three times the $68 trillion GDP of the same countries.
By 2022, built-asset wealth is forecast to increase by 35 per cent to reach $261 trillion. Global built-environment wealth has topped $193 trillion, according to the report.
“Indicators like GDP and unemployment, which are traditionally used to define a country’s performance, only tell one side of the story,” said Simon Rawlinson, head of research and insight at EC Harris. “While GDP quantifies national income, our analysis of the total stock of built assets provides an indication of accumulated wealth and the resources which can be drawn upon to fuel economic growth.”
Singapore citizens have the highest built-asset wealth per person, at an estimated $156,000 each, and the fastest growth over the next decade is expected in Middle East and Africa and Asian regions, with 63 per cent growth expected.
The US currently tops the built-as set wealth table, with $39.7 trillion, followed by China with $35.4 trillion and Japan with $18.3 trillion. This is forecast to increase to $47.2 trillion by 2022 – a rise of 19 per cent.
However, China is rapidly gaining ground on the US and could overtake it by as early as 2014. By 2022, China is expected to have accumulated $75.7 trillion in built assets. The biggest European country was Germany, in fifth place with $10.4 trillion. Europe is lagging behind generally, with built-asset growth of just 2.7 per cent predicted over the next decade.