Connect with us

Money

Mapping the World’s Wealthiest Cities

Published

on

Mapping the Wealthiest Cities in the World

The Top 15 Cities Globally Hold $24 Trillion in Wealth

That’s about 11% of the world’s total private wealth

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Which cities are the world’s economic powerhouses, and what portion of global wealth is located in these key urban centers?

Today’s chart pulls information from the latest report from market research firm New World Wealth, which we previously cited weeks ago when we visualized the shift in global wealth over the last decade.

The World’s Wealthiest Cities

The data shown in this chart represents the total amount of private wealth held by all the individuals living in each of these cities.

Figures here include all assets (property, cash, equities, business interests) less any liabilities. Meanwhile, government funds are excluded from these figures.

RankCityTotal Wealth
#1New York City$3.0 trillion
#2London$2.7 trillion
#3Tokyo$2.5 trillion
#4San Francisco Bay Area$2.3 trillion
#5Beijing$2.2 trillion
#6Shanghai$2.0 trillion
#7Los Angeles$1.4 trillion
#8Hong Kong$1.3 trillion
#9Sydney$1.0 trillion
#10Singapore$1.0 trillion
#11Chicago$988 billion
#12Mumbai$950 billion
#13Toronto$944 billion
#14Frankfurt$912 billion
#15Paris$860 billion

New World Wealth also mentions that there were eight cities that just missed out on the top 15: Houston, Geneva, Osaka, Seoul, Shenzhen, Melbourne, Zurich and Dallas.

It should also be made clear that wealth is a different measure than Gross Domestic Product (GDP), which is another common metric used to gauge economic power. That said, we do have a list of U.S. cities by GDP size if you’d like to explore the GDP measure on a city level, as well.

Wealth Past and Present

According to the same report, over last 10 years, the cities with the fastest growing rates of wealth were San Francisco, Beijing, Shanghai, Mumbai, and Sydney.

Meanwhile, Mumbai is expected to be the city that will see the highest rate of growth over the next decade.

Interestingly, the report also singles out two major Chinese cities as ones to watch:

Shenzhen: With $770 billion in wealth, this city just misses the Top 15 list. It’s considered the high tech capital of China and is home to the Shenzhen stock exchange (2nd largest in China, and 8th largest in the world). Major smartphone manufacturer Huawei is also based in the city.

Hangzhou: With $425 billion in wealth, this city doesn’t quite measure up to others on the list at first glance. However, it’s actually only a 45 minute train ride away from Shanghai ($2.0 trillion) – and people that work in Shanghai often have homes here as it is considered more scenic. Hangzhou is the fastest growing major city in China (in terms of wealth growth), and ecommerce giant Alibaba notably calls the city its home, as well.

Subscribe to Visual Capitalist

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.
Click for Comments

Green

Visualized: The Power of a Sustainable Investment Dollar

Do sustainable investments make a difference? From carbon emissions to board diversity, we break down their impact across three industries.

Published

on

Sustainable Investment

Visualizing the Power of a Sustainable Investment Dollar

Sustainable investments are booming.

Between January and November 2020 alone, investments in sustainable ETF and mutual funds grew 96%. The UN Principles of Responsible Investment now has over 3,000 signatories representing over $100 trillion in assets. The U.S. Commodity Futures Trading Commission established a Climate Risk Unit to analyze climate risk across derivative markets, and as of March 2021, new sustainability disclosures have come into effect in Europe.

But how do we know if sustainable investments have made a difference?

To answer this question, the above infographic from MSCI examines the effect of a sustainable investment dollar by looking at real-world examples.

A Sustainable vs. Unsustainable Dollar

To start, investing legend Benjamin Graham has compared the stock market to a “voting machine.” Just as consumers vote with their purchasing decisions, investors vote with their investment dollars. Especially in the short term, as more dollars flow to sustainable companies, this builds their exposure and access to capital.

In the long term, meanwhile, the market can be compared to a weighing machine. The market recognizes companies with profitable business models that improve their intrinsic value over time. Ultimately, this allows sustainable companies to expand and continue operating.

Given the rising momentum in both green assets and climate targets, here is how investment dollars have influenced and driven change across three industries.

1. Clean Energy vs. Fossil Fuel

Over the last several years, the energy sector has been associated with many of the problems causing climate change. For this reason, many investors are seeking out greener energy alternatives. But how does moving investment dollars from an ESG laggard to an ESG leader support the environment and society?

First, here is a brief explainer of ESG laggards and leaders:

  • ESG laggards: companies with the weakest environmental, social, and governance (ESG) performance in their sector.
  • ESG leaders: companies with the strongest environmental, social, and governance (ESG) performance in their sector.
Industry laggard: U.S. oil & gas companyIndustry leader: U.S. utilities company
Scale of carbon-intensive business lines equal to 73% of its operation47% lower CO2 emissions than the industry average
This is the equivalent of adding 26 million cars on the road annuallyThis is the equivalent of removing 9.9 million cars off the road annually
1 of 20 oil and gas companies are responsible for contributing to one third of GHG emissions since 1965Uses 3X as many renewable sources than industry average
3X fewer jobs are created vs. energy efficient sector, resulting in lower productivityThis is roughly the same as saving over 9 million pounds of coal burned
MSCI ESG Rating: CCCMSCI ESG Rating: AAA

Source: MSCI ESG Research

Based on the above example, investors have the ability to finance powerful green initiatives that reduce emissions by almost half, relative to their peers.

2. Safe vs. Unsafe Working Conditions

Weak safety protocols are a key sustainability issue for the industrial sector. Here’s how two companies compare:

Industry laggard: South African mining companyIndustry leader: U.S. mining company
11 fatalities in 2019Zero fatalities in 2019
Faced lawsuits from miners surrounding lung diseases contracted from dust exposure in gold mines
Settlement cost: $350 million
Board-level oversight monitors health and safety performance
Lags behind peers in high incident ratesLeads peers in low incident rates
Lags behind peers in setting incident reduction targetsLeads industry in lost time incident rate & total recordable injury rate
MSCI ESG Rating: CCCMSCI ESG Rating: A

Source: MSCI ESG Research

Despite the risks involved in the sector, investors can choose to support companies that take greater precautions to protect their workers.

3. Building Trust vs. Losing Trust

Over the last several years, the financial sector has faced increased scrutiny over fraudulent activities. Moving investment dollars from an ESG laggard to ESG leader may make a difference:

Industry laggard: U.S. bankIndustry leader: Dutch bank
$3 billion settlement in creating fictitious accounts to meet aggressive sales targetsSustainable finance portfolio valued at over $20 billion
Drop in top-tier bank ratings13% annual increase in climate finance
Board effectiveness questionedIncludes over 60 green loans, mobilizing environmentally friendly projects
Resignation of board membersOver 55% of board is female
MSCI ESG Rating: CCCMSCI ESG Rating: A

Source: MSCI ESG Research

From board diversity to green loans, a sustainable investment dollar supports companies that are actively advancing society and the environment.

Sustainable Investment: The Time to Act

Recently, investor dollars and shareholder activism have been closely linked.

Between 2018 and 2020, large institutional investors filed 217 shareholder proposals on climate change alone, putting increased pressure on companies. Meanwhile, 270 proposals were filed on corporate political activity and 228 on fair labor and equal employment opportunity over the same timeframe. Across all ESG proposals, $2 trillion in assets were pushing for more equitable corporate action.

Through the power of a dollar, investors can send a clear signal to companies: the time for sustainable investing is now.

Continue Reading

Debt

Visualizing the Snowball of Government Debt

After an unprecedented borrowing spree in response to COVID-19, what does government debt look like around the world?

Published

on

Visualizing the Snowball of Government Debt in 2021

As we approach the second half of 2021, many countries around the world are beginning to relax their COVID-19 restrictions.

And while this signals a return to normalcy for much of the global economy, there’s one subject that’s likely to remain controversial: government debt.

To see how each country is faring in the aftermath of an unprecedented global borrowing spree, this graphic from HowMuch.net visualizes debt-to-GDP ratios using April 2021 data from the International Monetary Fund (IMF).

Ranking the Top 10 in Government Debt

Government debt is often analyzed through the debt-to-GDP metric because it contextualizes an otherwise massive number.

Take for example the U.S. national debt, which currently sits at over $27 trillion. In isolation this figure sounds daunting, but when expressed as a % of U.S. GDP, it works out to a more relatable 133%. This format also allows us to make a better comparison between countries, especially when their economies differ in size.

With that being said, here are the top 10 countries in terms of debt-to-GDP. For further context, we’ve included their 2019 and 2020 values as well.

Rank (2021)CountryDebt-to-GDP (2019)Debt-to-GDP (2020)Debt-to-GDP (April 2021)
#1🇯🇵 Japan235%256%257%
#2🇸🇩 Sudan200%262%212%
#3🇬🇷 Greece185%213%210%
#4🇪🇷 Eritrea189%185%176%
#5🇸🇷 Suriname93%166%157%
#6🇮🇹 Italy135%156%157%
#7🇧🇧 Barbados127%149%143%
#8🇲🇻 Maldives78%143%140%
#9🇨🇻 Cape Verde125%139%138%
#10🇧🇿 Belize98%127%135%

Source: IMF

Japan tops the list with a ratio of 257%, though this isn’t really a surprise—the country’s debt-to-GDP ratio first surpassed 100% in the 1990s, and in 2010, it became the first advanced economy to reach 200%.

Such significant debt burdens are the result of non-traditional monetary policies, many of which were first implemented by Japan, then adopted by others. In the late 1990s, for instance, the Bank of Japan (BoJ) set interest rates at 0% to counter deflation and promote economic growth.

This low cost of borrowing enables businesses and governments to accumulate debt much more freely, and has seen widespread use among other developed nations post-2008.

What are the Risks?

Given that a majority of countries in this visual are red (meaning their debt-to-GDP ratios are over 50%), it’s safe to say that government borrowing is common practice.

But are large government debts a cause for concern?

Some believe that excessive borrowing will lead to higher interest costs in the long run, which could detract from economic growth and public sector investment. This theory is unlikely to become a reality anytime soon, however.

A recent report by RBC Wealth Management reported that the cost of servicing U.S. federal debt actually decreased in 2020, thanks to the low borrowing costs mentioned previously.

Perhaps a more prescient question would be: how long can the world’s central banks keep interest rates at near-zero levels?

Continue Reading

Subscribe

Join the 240,000+ subscribers who receive our daily email

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Popular