Sky City One, is an 838 m (2,749 ft) tall skyscraper approved for construction in the city of Changsha, Hunan in south-central China. If completed, it could become the tallest building in the world.
14 years ago the topic of the “Skyscraper Index” suggests that the very capital intensive process of designing and constructing world record-breaking buildings is a sign that funds are being malinvested, and that such vanity projects are thus a sign of impending financial or economic crisis.
Economists click here like Andrew Lawrence, Mark Thornton and Vikram Mansharamani highlighted these phenomenas.
- New York’s Empire State Building was begun in the financial bubble that led to the Wall Street Crash of 1929
- The Petronas Towers in Kuala Lumpur were completed in 1997, the year the Asian Financial Crisis struck
- Taibei 101, Taiwan’s iconic building began construction as the world marched towards the Dotcom meltdown
- The Burj Khalifa in Dubai began construction during the Emirate’s real estate bubble, which finally burst dramatically during the Global Financial Crisis.
The misallocation of credit associated with record-breaking buildings is a hotly contested topic. As China sets to retake the tallest building crown after a near miss with the Shanghai World Financial Center, the over-investment issue will again spring to mind.
Whilst holding a world record can attract users to a building (and thus actually increase value), historically the commencement of many of the world’s most iconic tall buildings has aligned with serious local or global financial distortion.