The Harder They Fall: The Risky Business of China’s Big Building Boom

On 16/08/2013 by Site Default

While a lack of necessary permits recently stymied China’s construction of Sky City, the latest contender in world’s never-ending Tallest Building competition, the nation suffers no shortage of ridiculously tall buildings. At a height of 2,000 feet, the under-construction Shanghai Tower is surpassed only by Dubai’s Burj Khalifa, and is touted by its architects at Gensler as a symbol of “the emergence of China” and “the development of Shanghai as a major financial center.” Developers hope that the forthcoming beacon of modern prosperity will attract global financial institutions to its trading floors: “We’re planning to start operations in 2015, and I believe the economy will improve by then,” Shanghai Tower Construction and Development president Gu Jianping told the Wall Street Journal. While his cheerful “build it and they will come” approach is full of optimism, to urban planning enthusiasts, it signals impending financial doom.

For starters, the looming arrival of Sky City and the $1.7-billion Shanghai Tower, financed by shareholders and loans, has prompted analysts to revisit the Skyscraper Index, a 1999 model pinning the arrival of every new World’s Tallest Building of the past 150 years to monumental economic collapse for the country in which it is built. The topping out of the Empire State Building preceded the Great Depression in 1929, for example, and Dubai’s Burj Khalifa the Middle East debt crisis of 2009. “Skyscraper construction is characterized by bursts of intense activity with easy-to-get credit, rising land prices and excessive optimism,” Barclays Capital analyst and Skyscraper Index creator Andrew Lawrence once explained to CNN, “but by the time those skyscrapers are finished, the economy has slipped into recession.”…

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