China overtakes USA as global leader in built asset wealth

The health and wealth of a nation can be measured in many different ways and while factors such as GDP or employment have great value, a prosperous society is underpinned by a well-developed built environment that meets the needs of its people and economy.

The Arcadis Global Built Asset Index calculates the value of all the buildings and infrastructure that contribute to economic productivity in 32 countries, which collectively make up 87% of global GDP. 

Total built asset wealth now stands at an estimated US$218 trillion, which is the equivalent to US$30,700 per person alive today. China now has a built asset wealth of US$47.6trillion, overtaking the USA which comes in second place with a wealth of US$36.8trillion.  Since 2000 China has invested US$33 trillion in its built assets, a total that exceeds all other economies combined. The growth is evidence of China’s unprecedented level of investment in its infrastructure – 9% of GDP – which outpaces global competitors like the USA, which currently invests just 2%. 

This year’s research also sees Qatar become a global leader, toppling Singapore as the most asset rich country per capita, with built assets of US$198,000 for every citizen.

Julien Cayet, Global Leader, Business Advisory at Arcadis comments: “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 uncertainty now on the horizon, even China and its fast-growth neighbors will need a renewed focus on quality over quantity.  

“Developed economies have experienced a long-term stagnation and decline of their built assets stock, as aging infrastructure falls into disrepair and investment fails to keep up. This revelation comes at the very time they may need to tighten the fiscal belts and do more with less. It is critical that each investment they make – be it new buildings and infrastructure, or upgrade and repair – considers the whole lifecycle of these assets to deliver the built environment that their society needs.”

The top ten nations on the 2015 Arcadis Global Built Asset Wealth Index are:

Rank	Country	2015 (US$)	Ranking change from 2013
1	China	47.6tn	+1
2	USA	36.8tn	-1
3	Japan	18.2tn	=
4	India	15.2tn	=
5	Germany	10.2tn	=
6	Russia	8.4tn	+3
7	Italy	7.914tn	=
8	France	7.912tn	-2
9	South Korea	6.1tn	-1
10	Brazil	6tn	+3

Selected others

13	UK	4.8tn	-2
16	Australia	3.3tn	+2
17	Saudi Arabia	3.2tn	+1
20	Netherlands	2.2tn	-1
24	Belgium	1.4tn	-1
25	UAE	1.3tn	=
30	Chile	0.9tn	=

The shifting wealth to emerging economies
The Global Built Asset Wealth Index shows a dramatic shift of wealth to emerging economies, with the traditional economic superpowers – the G7 – showing a net decline in the value of their built assets since 2012. Structural assets depreciate at a rate of around 5% per year, meaning that this level of investment is the minimum required to maintain the status quo, a figure that equates to US$1.4 trillion in the US.

In Europe, the almost decade-long economic slowdown has also had the negative effect of holding back investment. Meanwhile, economies including Indonesia, Thailand and the Philippines were amongst the biggest gainers.

How can built assets be made to last?
A strategically planned, highly developed and well maintained built environment is crucial to the economic and social success of a nation.  

In order to understand the driver for built asset development it is important to better understand the cycle of development that each nation goes through on its journey to prosperity and then learn from other nations that have already been through that cycle, drawing on experience from around the world.

The built asset development race seems set to continue well into the next decade as developing nations look to secure their long term economic future. Establishing a foundation built on bricks, mortar and infrastructure is a fundamental priority.  

Overall, the most successful nations will be those that consider the whole lifecycle of the assets they are building in order to thrive.  Through doing this, built asset owners can be more confident that the assets they are creating will be built to last and can underpin a successful economic and social future.