China's emergence as an economic powerhouse has left the country accounting for more than half of the global middle class, on the back of broad gains that have offset rises in income inequality elsewhere, said the latest annual global wealth report by Allianz SE.
The Allianz Global Wealth Report 2015 at the close of 2014, China had roughly 570 million people in the middle class — defined by Allianz as people with net financial assets, including bank deposits, securities, insurance and pension funds, but not real estate, of between €6,100 ($6,837) and €36,700.
That would be almost three-fifths of a global middle class that Allianz said topped 1 billion people for the first time at the end of 2014.
Arne Holzhausen, an economist with Allianz and one of the authors of the 2015 wealth report, in a telephone interview called China's “amazing story” the driving force behind the rise in the fortunes of the global middle class in recent years.
The report showed net financial wealth of all private households around the globe topping €100 trillion or the first time at the end of 2014.
The middle class's share of that wealth stood at roughly 17%, up 10 percentage points from 7% at the turn of the century, said Mr. Holzhausen. Over that same 14-year period, the share of the “wealth upper class” dropped to 80% from 92%, the report noted.
The widespread distribution of China's growing wealth stands in contrast to rising inequality in the U.S., with the report showing the U.S. Gini coefficient, a measure of wealth distribution, at a samplehigh of roughly 85%, up four percentage points since the turn of the century and well above the global average for 2014 of under 65%.
By contrast, China's Gini coefficient stood at 52.23%, the lowest of 16 countries from Asia and Latin America the report sampled.
The report also noted that the combined financial wealth of China's citizens topped that of Japan for the first time.
The wealth distribution trends of the past 14 years in China, the U.S. and elsewhere won't necessarily continue, said Mr. Holzhausen. With income inequality under a spotlight now in the U.S., the current moment might prove the “high point of inequality” there, he said. Meanwhile, the slowdown of China's economy now could likewise slow the spread of wealth there, he said.