The world is witnessing a strange economic paradox. According to the Swiss Bank Credit Suisse’s Global Wealth Report 2019, while the gap between rich and poor countries is narrowing, the world’s most affluent people still control the lion’s share of global wealth. The global top 10% rich individuals own 82% of the world’s wealth.

The United States and China were the two largest contributors to the 2.6 percent rise in global wealth to $360 trillion over the past year. In 2018, China was home to more members of the global top 10% than the United States for the first time in history. Wealthy individuals are defined as those with assets of at least $109,403. But the United States is still home to the largest share of millionaires of any country. Credit Suisse found that 40% of the world’s millionaires — some 18.6 million are American — compared to China’s 4.4 million.

With time the Chinese have been getting richer and richer. “Wealth in China started the century from a lower base, but grew at a much faster pace during the early years,” Credit Suisse said in the report. “It was one of the few countries to avoid the impact of the global financial crisis. China’s progress has enabled it to replace Europe as the principal source of global wealth growth and to replace Japan as the country with the second-largest number of millionaires.”

As per Credit Suisse’s survey, there are 100 million Chinese in the top rank, compared with 99 million Americans. And in terms of total wealth, China now ranks second behind the US. Significantly, China’s progress has enabled it to replace Europe as the principal source of global wealth growth and to replace Japan as the country with the second-largest number of millionaires.

Despite overtaking the United States as home to the most members of the top 10%, the overall growth of China’s ultra-wealthy class stalled in 2018. Tariffs and declining exports slowed China’s overall economic growth last year. China also has a substantially larger population than the United States — 1,384,688,986 in 2018 compared to the United States’ 329,256,465.

According to the Credit Suisse report, three factors affect how many millionaires live in any given country: The size of a country’s adult population, average wealth, and levels of wealth inequality. Globally, the amount of wealth per adult reached a record high of $70,850 in mid-2019. The bank defines a person’s wealth as the sum total of his or her financial assets and non-financial assets – mostly comprising housing – minus the person’s total debt.

Switzerland tops the list of rich countries – a region with the world’s wealthiest people, averaging more than $560,000 in net assets per person. The country also recorded the biggest jump in the aggregate wealth of all its people, mainly because of a strengthening Swiss franc. Hong Kong, despite facing a recession following months of anti-government protests, is in the second place after Switzerland in terms of wealth per person. According to the Swiss Bank’s report, wealth levels in the US, China, Japan, India and Brazil all increased in 2018. By contrast, there was a sharp drop in the value of the Australian dollar with people Down Under losing a staggering $28,670 in wealth per adult between mid-2018 and mid-2019. However, the country still has one of the highest levels of wealth per adult in the world.

But the sad fact is that global wealth remains concentrated in the hands of a limited number of richest people in the world. The lower half of the global population collectively owns less than one percent of the world’s net assets, while the top one percent owns about 44 percent of all wealth.

While the world’s rich-poor gap has been widening, a welcome development is that the inequality between countries has been shrinking over the past century. The study shows that financial asset growth was a major reason for widening inequality after the 2008 financial crisis, but now the growth in financial assets – such as cash, stocks and bonds – is slowing.

An increase in non-financial assets – such as houses – is fuelling wealth creation in emerging economies. Non-financial assets accounted for the bulk of new wealth in China, Europe and Latin America, and almost all new wealth in Africa and India.

Many political leaders worry about the rising wealth inequality and consider it to be a major source of economic and social disorder in the world today. They complain about a shift of wealth to the top at everyone else’s expense and about plutocrats dominating policymaking in Washington and other world capitals. It is clear that without regulating free market capitalism, the world will be getting more and more unequal as years roll on.