The first two decades of the 21st century marked a phenomenal shift in skyscraper construction from the United States to Asia:
Only six commercial towers over 300 metres were built in the US in the first two decades of this century. In contrast, since 2000, China has built a staggering 1,575 skyscrapers, accounting for 60 percent of the world’s new high-rises. By 2021, Asia housed 80 percent of the world’s skyscrapers, with China leading the Asian skyscraper boom. Fuelled by its spectacular economic growth, rapid urbanisation and a yearning to display its financial and technical capability, China found the construction of skyscrapers as a fitting symbol to announce its prowess to the world.
China also exhibited almost an obsessive drive to build the tallest structures. This appears to be linked to the country’s target of 60 percent urbanisation by 2020, and relocating about 100 million workers from villages to towns by granting them urban resident status by then. The South China Morning Post (SCMP) reported that China invested over ¥1 trillion (US$1.37 billion) annually in redeveloping run-down urban areas with landmark towers to showcase the successes of urbanisation. By the second decade of the century, China had eclipsed all other countries in skyscraper production, boasting the largest number of such high-rises in the world.
The Chinese local governments have played a significant role in this skyscraper boom. Local governments were lush with capital and strongly incentivised by the Chinese national government; the sub-national officials within local governments in China promoted major urban projects. These officials had reason to believe that such projects would attract investments and propel their careers up the high slope. As a consequence, local governments subsidised skyscraper development through discounted land prices, up to 40 percent below market rates, to encourage the development of new urban agglomerations. Evidence suggests that China’s largest cities competed with each other in building taller, which then spread out of megacities to smaller cities by Chinese standards.
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Many Chinese skyscrapers were marred by lax construction and fire standards. For instance, one of China’s tallest skyscrapers, the Shenzhen Electronics Group Plaza, was evacuated in May 2021 after it began to shake. The Chinese government was also not enthused by the local culture of constructing ‘copycat’ buildings aping Western architecture, which often neglected the Chinese cultural identity and the urban context in which they were built. Additionally, the government was frustrated by ‘vanity projects’— skyscrapers built to make a statement without assessing the actual demand for additional floorspace in the city. Other cities faced a situation where half-built skyscrapers remained incomplete as local government ran out of funds to complete them.
Around the same period, China found itself engulfed in a real estate crisis.
The real estate “crisis” in China is actually government policy. A couple of years ago, in the CPC’s general meeting, it was decided to force investment out of real estate and into manufacturing. At that time, China accounted for about 30% of world manufacturing, greater than the next four, US, India, Germany, and Japan, combined. (Actually, Russia has now replaced both Japan and Germany world manufacturing rankings.)
Did the author mean to say, “Local governments were flush with capital”?
More topically, America is engulfed in a vastly greater crisis in real estate than China’s: scarcity, especially an artificially induced strangling scarcity. To “investors” in real estate, however, scarcity is not only desirable but actually necessary, because banks, landlords, and other parasites care nothing for the real utility of a structure to its inhabitants, only its financial utility to themselves. Indeed, the continuing non-bankruptcy of the FIRE “economy” is utterly dependent on there being no further net development, and in modern history the most effective driver of the artificially induced strangling scarcity and greatest boon to the ambient value of real estate has been the forcing function of forward-deployed H. erectus.