More Wealthy Chinese Than Wealthy Americans – Really?

While recovering from my hip replacement surgery this week, I ran across a new report by global banking giant Credit Suisse which found there are now more “wealthy” Chinese than wealthy Americans in the world.  Put differently, there are now more rich Chinese – those who rank in the world’s Top 10% – than there are Americans in the same rank, for the first time.

While America remains the wealthiest nation in the world by far, and while the Top 10% richest Americans own far more assets than the Top 10% of any other nation, it is nonetheless interesting that there are now more Chinese in the global Top 10% than there are Americans.

It’s no secret that the growth in China’s middle and upper classes has been exploding in the last three decades or longer. China’s GDP has soared by 10% or more annually over most of the last 30+ years, although it has slowed to near 6% recently which is still great. With a population of 1.4 billion people, the largest in the world, it is therefore no surprise  that there are now more rich Chinese than in any country in the world, including the US.

The latest Credit Suisse report found that among the world’s richest citizens, 100 million are Chinese, while only 99 million are American – for the first time ever. While that is a great accomplishment for China, I need to put it into some perspective for you.

The United States still has many more millionaires than China – 18.6 million, or 40% of the world’s total, versus only 4.4 million in China. We’re also adding to the millionaire count at a faster clip than China or any other country. Interestingly, the Credit Suisse report sites low US interest rates and Republican tax cuts as being partly responsible for the country’s 11th consecutive year of rising wealth.

Also, the average American adult is still much richer than their Chinese counterparts, with US wealth per adult at $432,365 on average compared with $58,544 in China, according to the report. Wealth in this case includes total savings, including the value of one’s home(s), 401(k) and any other assets they may have, minus any debt.

According to data from the Federal Reserve, the average US household had net worth of $692,100 in its latest survey of family finances. If that number sounds high, it’s because US net worth averages are heavily skewed higher by the super-rich.

The Credit Suisse report highlights the extent to which global wealth is concentrated at the very top. The top 10% own 82% of total global wealth, while the bottom 50% of adults accounted for less than 1% of total wealth. The top 1% alone owns almost half of all global assets, according to the latest wealth report.

The threshold to make it into the top 10%, globally, is roughly $109,400 in net assets. To be in the top 1%, you’d need just above $936,400. The share held by the bottom 90% now accounts for 18% of global wealth, up from 11% in 2000.

The bottom line is, while there may now be more “wealthy” Chinese than wealthy Americans, the average rich person in China has a fraction of the net worth of the average rich person in the US.

More Dogs & Cats Than Kids in America’s Largest Cities

Another interesting, but troubling, thing I ran across while recuperating this week is the fact that there are more dogs and cats than kids in many of America’s largest cities. In New York City, for example, city-journal.com reports there are 1.1 million dogs and cats and several hundred thousand other pets, versus only 1.1 million kids enrolled in NYC’s public schools and kindergartens.

Nationally, about half of US households own a pet, which adds up to at least 77 million dogs and 54 million cats. Generationally, Millennials are the most enthusiastic pet owners, with some 70% boasting of having at least one pet.

What you’re less likely to see, especially in America’s largest cities, are children. Pets are now more common than kids in many US cities. San Francisco, for example, is home to nearly 150,000 dogs but just 115,000 children under age 18. Farther north, Seattle has more households with cats than with kids. Nationwide, pets outnumber children in apartment buildings.

High-density cities are losing families with children over age six, while growing their populations of college-educated residents without children. Indeed, the share of children under 20 living in big cities has been falling for 40 years. For better or worse, young professionals’ four-legged friends have replaced children.

And finally, the article I read said the cost of ownership over a medium-sized dog’s lifetime has grown at twice the rate of inflation since 2008, to $12,700 last year. Wow! Americans spent $70 billion last year caring for and feeding pets, while they spent only $59 billion on childcare.  Who knew?

In conclusion, dogs and cats should be welcome in cities, of course, but their ever-increasing popularity among young professionals – and the attendant decline in children – portends a troubling shift in urban America that we will have to reckon with in the coming decades.