Visit China’s Changsha, See World’s Tallest Building

Changsha, the capital of China’s Hunan province, has just granted approval for the world’s tallest building.  On the fifth of this month, the Wangcheng district government signed a contract with Broad Group, a local firm, which promised to put up the 838-meter tower in seven months.

Seven months?  If all goes according to plan, Tiankong Chengshi—Sky City—will be completed sometime next January.  The planet’s current record-holder, the Burj Khalifa in Dubai, took six years to build.

Why waste years when you can do something in months?  Broad promises five stories a day with its prefabricated techniques.  The company is famous for constructing a 15-story hotel in six days in 2010 and a 30-story one in 15 days the following year.  Both structures are located in Changsha.

Most of Sky City’s 220 floors will be apartments for 174,000 people, and the rest will house a hotel, school, hospital, offices, shops, and restaurants.

Broad believes it doesn’t need much money to complete the project.  The company says Sky City will cost four billion yuan, about $628 million.  Dubai’s Burj, on the other hand, required an estimated $1.5 billion to build.

Yet even if Broad can finish the building on budget, the economics of Sky City are dubious.  The commercial viability of tall buildings are always undermined by the excessive space needed for structural elements—and for elevators.  Sky City will have 104 of them.

And so far, Sky City does not look like a winner.  Broad originally planned a 666-meter skyscrapper, but the local government wanted the world’s tallest.  That’s a dead giveaway politics are distorting the economics of the project.

Local politics and record-setting buildings don’t mix well in China.  Zhuhai, the go-go city just north of the enclave of Macau, in 1992 wanted a private company to construct what would have then been the world’s tallest building.  That magnificent project reached the third floor, when it stopped five years later due to a lack of funds.

At the moment the central government has yet to give its blessing to Sky City, and many think the building will never get out of the ground.  Yet don’t count out ambitious Broad.  Even though its own finances are not too hot, that may not be critical factor.

Why not?  As a part of Premier Wen Jiabao’s latest stimulus campaign, the State Council’s National Development and Reform Commission has been green lighting all sorts of uneconomic projects across the country, including, most infamously, two steel mills.  The last thing China needs is another blast furnace, so Beijing might as well authorize something unique.

There are few coincidences in that country, so Sky City fans must surely have been pleased when China Daily on May 19 highlighted their favorite city.  “The development of central China will be a pillar of the nation’s economic growth amid the slowly recovering global economy and China’s cooling GDP expansion,” wrote the official newspaper as it touted Expo Central China 2012, held in Changsha.  Said Vice Premier Wang Qishan at the event, “The development of the central region has become an important factor supporting China’s economic growth and is closely related to the transformation of the country’s economic growth pattern and the adjustment of its economic structure.”

Broad’s timing, therefore, is perfect.  Sky City may just get central government approval—and state bank support—after all.

So it’s not too early to book your tickets for Changsha for late January.  I heard the topping-out ceremony there will be a doozy.

Follow me on Twitter @GordonGChang

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