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China’s Skyscraper Syndrome

By U.S. standards, skyscrapers are buildings taller than 152 meters. According to a Xinhua article, China now has over 200 skyscrapers under construction, a number comparable to existing U.S. skyscrapers. China already has five out of 10 of the world’s tallest buildings. In the coming three years, China will see one skyscraper finished every five days. Five years from now, the number will be quadruple that of the U.S. 

The concern is overinvestment, as half of the top 50 of China’s skyscrapers are in the real estate business. Skyrocketing housing prices result in pressure to sell or rent the units. Meanwhile, small-to-middle sized cities are leaping forward. The southwest city of Guiyang is planning 17 skyscrapers, and Guangxi Province’s Fangchenggang, with a population of one million, will build a 528-meter-high financial center. 

The article mentioned Andrew Lawrence, a former Deutsche Bank economist, who invented the “skyscraper index.” In his research, Lawrence observed that major downturns in the economy occurred shortly after skyscrapers were completed.

Source: Xinhua, June 9, 2011