China is home to half of the ten tallest towers being constructed around the world today. That prodigious effort may belie an economic bubble, according to Vikram Mansharamani, author of BoomBustology: Spotting Financial Bubbles Before they Burst:
If you look through Mansharamani’s lenses, it’s clear to see there’s a bubble going on in China. Tall buildings aren’t just symbolic of reckless ambition. “Skyscrapers are manifestation of easy money, overconfidence, and hubris,” he says. And they are excellent indicators of a top. “In New York in 1929 there were three buildings competing to be the world’s tallest skyscraper,” he notes. In 1997, the massive Petronas Towers in Malaysia were completed just in time for the Asian financial crisis. The Burj Dubai rose in 2007 to snatch the title of world’s tallest building – just in time for the financial crisis to his the Persian Gulf. …
Throughout China, provincial officials are obsessed with hitting targets for GDP. Focusing on what should be an end result as an initial goal “leads people to do things that may not make economic sense.” Mansharamani cites as an example a regional leader in China who, desperate to meet a GDP target, blew up a recently constructed bridge. “He got credit for the explosives he bought, and then for the steel and cement he bought and the constructions workers he hired.”
Image: Gensler via Inhabitat.com
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