China’s middle-class overtakes US for first time as global inequality grows

Global inequality is growing, with half the world’s wealth in the hands of just 1 per cent of the world’s population, according to a new report which showed for the first time that China has a bigger middle-class than the US.

The report by Credit Suisse also found that there was a slowdown in the pace of growth of wealth of the middle classes compared with that of the very richest.

“This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time,” said Tidjane Thiam, chief executive of the Swiss bank.

A person needs only US$3,210 to be in the wealthiest 50 per cent of world citizens, US$68,800 to be in the top 10 per cent and US$759,900 to earn a place in top 1 per cent. Some 3.4 billion people – 71 per cent of all adults in the world – have wealth below US$10,000 in 2015. A further 1 billion – 21 per cent of the global population – fall in the US$10,000-US$100,000 range.

Each of the remaining 383 million adults – 8 per cent of the population – has wealth of more than U$100,000, including 34 million US dollar millionaires, who comprise less than 1 per cent of the world’s adult population. Some 123,800 individuals within this group are worth more than US$50 million, and 44,900 have more than US$100 million. The UK has the third-highest number of these so-called ultra-high net worth individuals.

“Wealth inequality has continued to increase since 2008, with the top percentile of wealth holders now owning 50.4 per cent of all household wealth,” the report said.

The report concludes that global wealth has fallen by US$12.4 tillion in 2015 to US$250 trillion – the first fall since the 2008 banking crisis. This is largely as result of the impact of the strength of the dollar, the currency which is used as the basis for Credit Suisse’s calculations.