China's Epic Skyscraper Construction Spree: A Harbinger Of The Crash?

Tyler Durden's picture

If the Barclays Skyscraper Index, which posits bursts of skyscraper construction are a harbinger of great economic collapse and market crashes, is accurate, then the world is in for a, well, world of pain. And nowhere more so than in China.

While for nearly a century the undisputed leader in the constuction of massive, phallic-looking, mega-buildings that reach for the skies was the US, over the past decade the baton has undpisutedly shifted to the middle east, and specifically the Arab Emirates and Saudi Arabia, which currently house the top and second tallest skyscrapers in the world. The visual progression of the title holder for world's tallest building is shown on the chart below.

 

The complete list of the Top 100 currently completed skyscrapers, courtesy of Skyscraper Center, is shown below.

 

However, as the following summary from Vizual-Statistix indicates, one country that is embarrassingly "only" in fifth place when it comes to tallest buildings is China.

 

Which is why the centrally-planned communist country with a penchant for issuing trillions of dollars in loans each year then bailing out all insolvent financial institutions and shadow banks, and an even greater penchant for creating excess capacity, has taken it upon itself to catch up.

And as the following list of projected skyscrapers, over the next several years China will be host of 5 of the world's top 10 tallest buildings, and 14 of the top 20!

 

That's ok though - China is obviously suffering from a case of Skyscraper envy.

However, the true scale of the problem only emerges when one expands the list of buildings either already in construction or already proposed. The list below shows only the skyscrapers proposed or currently in construction just in China!

Which is why if the Barclays Skysraper Index is indeed correct, then China - ignoring all other sirens of an imminent credit bubble implosion - better watch out below.

Source: Skyscraper Center

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SoberOne's picture

"One" world trade center. Fuck you NWO and fuck your triangular sides.

Bearwagon's picture

Wait for a really hot summer day, without a cloud. This thing will collapse into it's own basement as soon as it gets a little warmed up, eh? There are bad earth rays or something at that place, that make steel melt like butter in the microwave.  ;-)

Headbanger's picture

Notice the straight trend line along the roof tops and spires (not including antennas) starting at 1901 with the Dubai tower breaking above it.

So the breaking off of the upper quarter or so of the Dubai tower will be a strong technical signal for the market crashing soon!

And don't forget the Chrysler Building is really a giant rocket for the Cone Heads to go home on!

earleflorida's picture

dubai's occupancy is only at ~50% ... bleeding $$$

Oh regional Indian's picture

They are hoping to fix that with something called the Dubai 2020 Expo.

Kick Can for another 6 years in that blot  in the desert.

Their playbook is full of such "schemes". A world cup here, an olympics there....

ori

mjcOH1's picture

"f the Barclays Skyscraper Index, which posits bursts of skyscraper construction are a harbinger of great economic collapse and market crashes, is accurate, then the world is in for a, well, world of pain. And nowhere more so than in China."

Should be epic.  

That or the 25 Chinamen most adept at backstabing their way to the top of the slave labor pyramid are more adept at managing growth than the free market (such as it currently is....blessed be the Kenyan).  One of those.

cifo's picture

I remember reading a similar post on ZH a couple of years ago.

Lore's picture

The taller the building, the smaller the penis.

MisterMousePotato's picture

Fascinating to think that the Sears Tower was built a mere 40 years ago. A lot can happen in 40 years, neh?

Terminus C's picture

"These are not the buildings you are looking for..."

Future Jim's picture

I just had lunch with two coworkers. Both were high dollar IT contractors. One said that he didn't know a third tower fell, and the other said he saw the video and feels certain that an ordinary fire caused that kind of collapse.

BTW, the second guy was a hyperpartisan who thinks that all Republican leaders are evil (especially Bush, Cheney, Rumsfeld) and all Republicans voters are stupid. He really likes Hillary. He thinks he is extremely skeptical.

Of course, all conspiracy theories may be wrong, but the official story also cannot be true.

pavman's picture

While you may not read this reply, I just wanted to add my $0.02.  I was watching when they mentioned tower 7 back in 2001.  They said they had to bring it down in a controlled demolition because of structural damage caused by the impact of the planes hitting the other towers.  I recall this very clearly and I think the people who try to overplay the "collapse of building 7" are just whack jobs and weren't watching the news as this event unfolded.  When I first heard of this conspiracy, I thought it was common knowledge but apparently people are idiots.

Ratscam's picture

wiring up a 42 floor building to bring it down in a controlled demolition (pulling it), requires months of planning and at least 10 days of preparation.
No one can do that in a matter of hours, no one!

National Blessing's picture

I keep waiting for the epic global financial collapse.  But it never seems to happen.  It's all just the same old same old.  I feel like Linus in the pumpkin patch.

Rafferty's picture

Me too.  I think everyone underestimated the durability of the printing 'solution'.  But I live in hope.

 

Jump, you bastards!

NickVegas's picture

Look at the Continental, the currency of the Revolutionary war. It survived massive counterfeiting by the English. It's all in your belief system.

akak's picture

 

Look at the Continental, the currency of the Revolutionary war. It survived massive counterfeiting by the English.

That is nothing but a bullshit revisionist lie spread by the likes of pro-fiat bankster apologists such as Bill Still the Fiat Shill and Ellen Brown the Money Clown to obfuscate the reality of fiat currency hyperinflation in the United States.  In fact, the large majority of all the Continental Dollars ever issued were printed under the direct authority of the Continential Congress itself, not English counterfeiters.

RafterManFMJ's picture

Bill Still the Fiat Shill and Ellen Brown the Money Clown

LOL

WmMcK's picture

I feel like C. Brown trying to kick the ball.

laomei's picture

"Meh" is hardly enough to explain the absurdity here.

Here's some basic economics which are ignored far too often by the west, which throws much of the whining about China out the window.  For the sake of stats, I'm going to use the most recent numbers and even be conservative with them, underballing rather than overshooting for China.

China currently has 100t RMB sitting in cash in bank accounts.  Keep in mind of course, that a good number of especially older people do not like/trust banks and keep cash/gold/whatever.  But, ignore that issue and you'll see a per capita, cash, non-invested amount of 77,000 RMB.  A family size of 2.91 means 224k RMB per household, in cash, not invested, not in bonds, securities, fixed deposits, just cash.  That's $37k.  Median household income in 2010 was about $10k.  It's higher now, but fuck it, let's be conservative and call it $10k for the sake of argument.  Household savings rate is 50% on average.  This means, that on average a family can stash away $5k a year in cash.  Unsecured debts are really not an issue, credit cards tend to be paid off in full monthly, student loan debt is not an issue either.  There's the mortgage to worry about, but inability to pay on a primary residence will not result in homelessness, so it's not a huge issue.

 

The US... average household savings is $3800 according to some statistic I saw, but it seems now more like the norm is living hand to mouth... I said I was being conservative though, so I'll abide by that.  Household median income is about $50k with an average savings rate below 4%, but fuck it, let's call it 4%.  Household credit card debt is ~$15k on average, student loan debt is about $23.5k a head, again, not using the most recent numbers, but average taking into account those who graduated quite a while back.  So a typical family with a pair of college grads is sitting on $62k of debt, with $3800 in the bank, pulling some $50k a year pre-tax, or being generous about $46k post-tax.  Average credit card interest rate is now 17% (there goes $2550), student loans about 7% (if you're lucky, there's another $3290).  Without even touching the principle, you're looking at $5840 gone in interest alone, that's 12.7% of your household income, poof, gone on servicing unsecured debt.  So average payments... For that student loan, you're looking at $6900 a year, on that $15k credit card debt, there goes another $5400 on minimum payments.  Keeping in mind of course, if you only make minimums, you're a slave for the next oh, 20+ years.  Congrats, you now have $33.7k in income that might start to be classed as "disposable".  Well, then there's that average $13,500 of auto loan debt which has to be serviced, kiss another $3000 good bye, plus insurance for it, there goes another call it bare-minimum $700.  Down to $30k now.  Another $3k to the gas.  $27k.  Shit, you have another car, in fact you have on average 2.28 cars? Let's just assume the other 1.28 are paid off, add in some very light maintenance and the extra insurance, there's another $1k.  $26k now for an average family that can now start to do things like pay rent/mortgage, buy clothes, food, etc.  Remember to put that 4% into savings, so more like $24k.  Average nationwide mortgage and rent payments are about the same at $1000 a month. Then there's utilities of course and food, and see how fast it just flies out the door?  The *real* disposable income is about $12k a year, assuming you're average of course, and oops, health insurance of course.  Hope you don't get sick/lose your job and get kicked out into the street.

 

Here's the number for China.  Credit card debt? Not an issue, everyone pays in full, and only higher earners really have them.  Student loans? What student loans?  Auto debt? You mean the one you paid for in cash? The one you basically drive for fun and could always just take the bus/subway instead which costs basically nothing? Or perhaps you mean your little moped/motorcycle which burns so little gas it's trivial.  Average household mortgage is 260k RMB, but that's only for the cities, and for those that bought with a mortgage.  Average annual payments are 24k RMB, generally speaking, the average person owns outright and those that bought are earning more than average.  Sure, there are the house slaves, but it's such a minority that it's not a big issue and city household incomes are around 100k RMB now before housing subsidy payments/withholdings which are pre-tax, so you're looking at nothing real paid in taxes either.  Farmer might be poor, but farmer's got his food, shelter and transport settled, so they might not have a lot of "nice things", but the income's mostly just disposable anyways.  Utilities are cheap, food... take your pick really, local markets and eating healthy costs basically nothing, eating out a lot, eating more meat and imports costs more.  Apart from food and housing in the city, everything's cheap... and those low wages you hear about don't bother to mention the company provided food and housing, meaning that those low wages are entirely disposable.

 

The point I'm getting at is this: China may, on average, have low per-capita income, but costs are low and savings rates are high.  What's better? Earning $50k a year, saving $2k of that and seeing the rest of it vanish into thin air.  Or earning $10k a year, saving $5k of that and seeing the rest of it go pretty far.  China has cash and assets, the US primarily debt, and the servicing of that debt is what is fucking everything over.  To the point where *real* "disposable" average household income in 2013 US is at about parity with 2010 China.  Any takers as to how it's comparing with 2013 China?  Sure, you might claim, China saves all that money out of *fear* of hospital bills.  Ok, that's a fair claim which is not inaccurate.  The difference being that Chinese, when dying, don't tend to go to the ends of the earth to keep granny kicking around for another week before the inevitable.  That savings gets passed down, as does the property, rather than seeing it go *poof* in a puff of smoke.  Healthcare reform here can and will unlock a bunch of that cash, and the Chinese government is, indeed pushing for more consumer-led economy.  Not really for the sake of salary, but for domestic jobs growth more than anything else and shoveling the unskilled labor out elsewhere.  Unlocking that cash most certainly will result in much higher wages all around, but that liquidity is not at all a bad thing.  It's fine to have a consumer-economy, it's bad when it becomes a debt-reliant consumer economy that has been stagnant for 30 years.  Fear of that is one of the big reasons you are seeing these massive engineering projects now.  Mainly, because it's still cheap to do it.  A massive subway network, high speed rail, airports galore, a vast expansion of the highway system... land's still cheap and labor is still cheap.  Once higher wages in a consumer-economy take hold, it's impossible.  In fact, in Shanghai and Beijing, you see some of it already.  Roads which were started late and have run into high property values... there they sit, unfinished, because the compensation amounts required are insane.  Once the basic structure is in place, upgrading it later isn't so hard.  The key is having it to begin with.  All those WPA projects back in the 1930s.. you know, the ones that still form the basis of most utilities in the US... how many of those would be even close to feasible today?  Pretty much none of em.  Same deal really.  These jumbo buildings.. once they're built, they're built, and smirk all ya want about Chinese engineering quality, but this sort of stuff is no-expense spared built-to-last shit.  Here's the future you're looking at... "Made in China" might not have as large a market share in the US anymore, but you'll be seeing a lot more BRANDS that are Chinese heading your way, which were primarily designed to be affordable for the middle-class Chinese who outnumber the entire US population.  The main difference is that one side will be paying in cash, the other side going further and further into debt chasing a dream that died half a century prior.

akak's picture

Wow Laomei, fascinating and sobering post!

Thanks so much for taking the time to compose it.

AbelCatalyst's picture

Towers of Babel one and all... Will humanity ever learn? It's the same movie rerunning over and over and over.... Kind of funny if it were not so sad!!

kaiserhoff's picture

An architect once gave a presentation on this to the local Kiwanis Club.

His take was that any building over four stories loses efficiency and is a waste of resources.  The elevators take up way too much space (as a percentage) and cost a fortune to maintain, and the parking/commuting problems are legendary.

It's been decades since people had to huddle together in one building.  That encourages meetings, a classic time sump.

Ignatius's picture

Agree, with one exception (a shovel ready project, we can use the work).

Build replicas of the Twin Towers out in the dessert somewhere and when completed remotely fly the same type airliners into them at the same locations and speeds and watch what happens.  You know where I'm going with this:  I surmise nothing extraordinary will happen.  Big bang and fires that eventually burn out.  Then we can all enjoy 300 million Americans and billions worldwide turning in unison towards the President for a comment.  I say he blinks.

I would give up my Saturdays running charity pancake feeds to finance this.

Yes_Questions's picture

 

 

built to original specs..

 

asbestos and all.

 

 

RafterManFMJ's picture

There really is nothing wrong with asbestos as long as you don't breathe it, touch it, or make eye contact with it.

Oh regional Indian's picture

Brilliant idea Ignatius! :-)

They can get the aircraft for cheap from one of hem Arrizona boneyards too.

New World Chaos's picture

This is the kind of project that can only happen after the revolution.  BitCoin kickstarter epic Lord of the Rings length Mythbusters 9/11 special!  The official story is the myth.  When the plane flames out, see how much nanothermite it takes.  When even that won't keep the hosed-down basement hot for months, try a neutron bomb.  You know it will end with them blowing shit up.  That's what always happens when it's myth BUSTED.

Midas's picture

I think he is probably right about the loss of efficiency, but I am sure there are variables from location to location.  That is why I get a kick out of the towers in Dubai. They appear to be in the middle of the, uh, desert, with miles of open land in every direction.   I do think Taipai 101 is a real gem though.

11b40's picture

Cheers to the Taipei 101, and the natives love it, too.  It is a real source of pride for them, as is their relatively well-managed economy.  I have not been there since 2006, but it was a busy place with tons of visitors.  Never went up to the obsevation deck as I did not have time to wait.

LMAOLORI's picture

 

 

Skyscrapers built out of cards

 

The $15 trillion shadow over Chinese banks

 

China analyst Charlene Chu explains why the nation is on the verge of crisis

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10611931...

philosophers bone's picture

But they are still so far behind - haven't they developed the expertise to let the cavemen fly commercial aircraft carriers into them?

TideFighter's picture

Seems ethnic groups having small penises build taller monumental erections. They could use more Porsche dealerships.

RafterManFMJ's picture

You've just explained why Africa has few tall buildings and many mud huts. Brilliant!

CheapBastard's picture

Lots of money to go around and wheels to be greased when they build one of these things....

Bearwagon's picture

These things will turn out to be unliveable whithout an abundance of cheap energy. Might as well be teared down immediately.

kaiserhoff's picture

Paris still has a boat load of six/seven story walk ups.  With one rickety service elevator somewhere if you can find it.

That's some measure of maximum utility for building up, up, up.

Matt's picture

Elevators are actually one of the most efficient systems for mass transit. Pretty sure they vastly exceed buses and trains in their efficiency.

brown_hornet's picture

Try running an elevator outside in a Chicago winter.

Bunga Bunga's picture

And try running an elevator when there is a power outage.

laomei's picture

Power outages have become stupidly rare in China... it's almost as if they cared about critical infrastructure or something.  Like, back in the day, there were rolling scheduled blackouts in smaller cities to help with the demands, but that's all pretty much a thing of the past now.  In my 10+ years in Beijing, I have had 0 outages of power not including scheduled building maintenance windows of less than an hour.  Furthermore, when power DOES go out, the people don't panic and start rioting... they find a flashlight.

Tom G's picture

China didn't build that.

The US government was and is primarily responsible.

Our Dear Leader once shot a 23 on an 18 hole golf course and then taxed and regulated 3 skyscrapers into existence!

ziggy59's picture

In a world of whacked out megalomaniacs, size still matters...

We are in trouble....

Never One Roach's picture

Did Chris Christie see his shadow this morning when he crawled out of his den?

Or was that a skyscraper's shadow sprawling across the NJ plains?

Temporalist's picture

Ok since nobody said it...

Penis envy much?

spanish inquisition's picture

Kingdom tower - I hope they put a steam plant on top of that so it can spew little white spurts of clouds to complete the image.