One in 7 people worldwide now belongs to the middle class, a study by German insurer and asset manager Allianz reveals. The largest contributor has been China, the Global Wealth Report 2018 points out.
In its latest Global Wealth Report, Allianz researchers emphasize that the United States has overtaken China again in terms of absolute private assets growth. In 2017, the US accounted for around 44 percent of global growth in gross financial assets of households, while China accounted for only about 25 percent, the report says.
Apart from such absolute figures, the survey offers insights into how far nations have come in fighting poverty. It argues that contrary to common perception, "the world is taking huge strides in lifting people out of extreme poverty, with 1 in 7 people on the planet now belonging to the global wealth middle class of a whopping 1.1 billion people."
Allianz says that China's climb up the global wealth ladder "has been truly impressive," with the world's second-largest economy accounting for half of the global wealth middle class.
Back in 2000, half of the roughly 500 million people who qualified as middle class came from Japan, North America and Western Europe, the report states. But at the end of 2017, China alone took that crown, "with the share of these industrialized regions shrinking to a quarter."
Long shadow of the financial crisis
At the same time, inequality has been widening in some countries that were earlier known for their fair distribution policies. Among them are Denmark, Sweden and Germany, the survey says.
Labor markets in some of the affected regions have made a slow and incomplete recovery from the 2008 financial crisis.
"In Scandinavia, [the problems] may be due to high debt levels among large parts of the population — in Germany, the dependence of many on the state pension system without having created a complementary capital-funded pillar is to blame," said Allianz Chief Economist Michael Heise.
The report also sheds some light on the changing sentiment of savers across the globe. While in the aftermath of the global financial crisis people tended to steer clear of shares and investment funds, they became more confident again in 2017, pumping significant resources into this asset class.
At the end of last year, investment in stocks made up 42 percent of all savings, the study shows.
"The fading love for bank deposits, particularly in the old industrialized countries, came not a second too early," said co-author Kathrin Brandmeir, adding that "savers finally recognized the sign of the times."