It isn’t US, China is now richest nation in world

During that period, China’s wealth zoomed to $120 trillion from $7 trillion in 2000.

The report also pointed out that in China and US, over two-thirds of the wealth was owned by the richest 10 percent of households. It said the share of wealth ownership of these individuals was increasing.

A majority of the global net worth, at 68 percent, was concentrated in the realty sector, while the balance was held in machinery and equipment, infrastructure and intangible assets like intellectual property and patents.

The report does not take into account financial assets while calculating global wealth as they are offset by liabilities.

The McKinsey & Co report also indicated that the rise in net worth during the period under survey outpaced the increase in global gross domestic product. The steep rise in net worth was a result of skyrocketing property prices delivered by declining interest rates. Meanwhile, asset prices are also about 50 percent above their long-run average relative to income. This casts a doubt on the sustainability of the wealth boom.

"Net worth via price increases above and beyond inflation is questionable in so many ways. It comes with all kinds of side effects," Jan Mischke, a partner at the McKinsey Global Institute in Zurich, told Bloomberg.

China faces the risk of a crisis over the debt of property developers similar to the 2008 financial crisis in US following a housing bubble burst.

The report suggests that the best way to avoid crisis is to invest the world's wealth into more productive investments that expand global GDP.

The McKinsey & Co report considered national balance sheets of 10 countries, representing over 60 percent of the world income.