Last updated: 13:37 / Wednesday, 4 November 2015
Built Asset Wealth Index

China Overtakes US as Global Leader in Built Asset Wealth

Imagen
China Overtakes US as Global Leader in Built Asset Wealth
  • China has overtaken the US as the world’s wealthiest country measured by the value of its built environment
  • The US built asset stock is largely unchanged in the past two years
  • Since 2000, China has invested $33 trillion in its built assets, a total exceeding all other economies combined
  • The Index shows a dramatic shift of wealth to emerging economies, such as Indonesia and Thailand

China has overtaken the US as the world’s wealthiest country measured by the value of its built environment according to the latest Global Built Asset Wealth Index published by Arcadis. The index calculates the value of all the buildings and infrastructure contributing to economic productivity in 32 countries, which collectively make up 87% of global GDP.

For the first time, built asset wealth in the US no longer leads the world. With wealth of $36.8 trillion, the US now trails China at $47.6 trillion. The US built asset stock is largely unchanged in the past two years, while since 2000, China has invested $33 trillion in its built assets, a total exceeding all other economies combined. The growth is evidence of China’s unprecedented level of investment in its infrastructure – 9% of GDP – which dwarfs global competitors like the US, which currently invests just 2% of GDP.

Tom Morgan, vice president, head of business advisory, North America at Arcadis –a design & consultancy firm for natural and built assets - explains: “A prosperous society is underpinned by a well-developed built environment that meets the needs of its people and economy. Therefore, a strategically planned, highly developed and well maintained built environment is critical to the economic and social success of a nation.

“Developed economies have experienced a long-term stagnation and decline of their built asset stock, as aging infrastructure falls into disrepair and investment fails to keep up. This decline puts even more urgency on public owners to find creative ways to attract finance, make smarter decisions regarding the maintenance of existing assets and to maximize every dollar spent – the whole asset lifecycle must be considered to meet society’s needs.”

Morgan continues: “China’s ranking this year marks a profound change in the global league table of the world’s wealthiest built asset nations. However, with so much global uncertainty from financial imbalances, unprecedented currency volatility and crashing commodity prices, even China and its fast-growth neighbors will need a renewed focus on quality over quantity.”

US trends

The Index notes that while the US built asset wealth embedded in real estate has demonstrated solid long-term growth, public infrastructure has not seen the consistent funding and policy needed to build investor confidence in such long term projects. In addition, the report notes that the US needs to find ways to maintain the integrity and service levels of its aging asset base for less money.

The shifting wealth to emerging economies

The Index shows a dramatic shift of wealth to emerging economies, such as Indonesia and Thailand, with the traditional economic superpowers – the G7 – showing a net decline in the value of their built assets since the 2013 report. Structural assets depreciate at a rate of around 5% per year, meaning this level of investment is the minimum required to maintain the status quo, a figure equating to $1.4 trillion in the US.

In Europe, the almost decade-long economic slowdown has also had the negative effect of holding back investment.

The top ten nations in the Arcadis Global Built Asset Wealth Index are:

The full report can be downloaded at this link

menu
menu