January 12th, 2012
03:01 PM GMT
Share this on:

Hong Kong, China (CNN) – The bigger they are, the harder they fall. That's the tenet behind the Skyscraper Index which tracks a link between construction booms of tall buildings and economic busts over the past 140 years.

Some say the facts are bizarrely coincidental. Others say the numbers don’t lie. But if true, the latest Skyscraper Index report from Barclays Capital suggests both China and India are due for economic doom because of their current skyscraper boom.

In no mincing of words, BarCap adds that China is the world’s “biggest bubble builder.”

The country already has half the world’s existing buildings higher than 240 meters – the minimum height for skyscrapers.

But China is not stopping there. It’ll add another 66 in the next six years. That’ll nearly double its current collection from 75 to 141. You see, China has 53% of the 124 skyscrapers currently under construction around the world. (And if you think they can’t do it, think again. China has challenged itself to put up a 30-story building in just 15 days. It’s set to open January 18.)

As for India, the world’s second most populous nation only has two skyscrapers, both in the financial capital of Mumbai. But that’s going to change quickly.

In the next five years, 14 more skyscrapers will shoot up around India. That includes the Tower of India, the world’s future second-tallest tower. (The current number two is the Taipei 101 in Taiwan.)

Andrew Lawrence is the man behind the Skyscraper Index. The Director of Property Research at Barclays Capital here in Hong Kong explains the index like this: “Skyscraper construction is characterized by bursts of intense activity with easy-to-get credit, rising land prices and excessive optimism. But by the time those skyscrapers are finished, the economy has slipped into recession."

And with China and India pushing skywards over the next several years, history’s boom and bust cycle suggests their economies may then crash back to the ground sometime near the end of this decade.

Just look to the past. In 1930, New York’s Empire State building, pictured above left in 1938, opened as the world’s tallest skyscraper rising 381 meters high. That was just as the Great Depression began to darken the U.S. economy. That lasted for more than 10 years.

In 1997, the Asian financial crisis hit just after the 452-meter Petronas Towers in Malaysia opened to take the crown of world’s tallest building.

Most recently in 2009, the Burj Khalifa opened and remains the world’s tallest skyscraper at just over 828 meters. And guess what, that event coincided with Dubai nearly going broke and heralded the Great Recession that we’re all trying to claw back from now.

And there are many more examples. So as China and India build higher and higher, there’s reason to be that much more leery of two looming financial fallouts in Asia.

We’re likely familiar with the adage “Build it and they will come”. But the person who penned that likely wasn’t thinking of economic meltdown.

Posted by: ,
Filed under: AsiaChinaIndiaRecession

soundoff (56 Responses)
  1. arthur uzo

    big for nothing are always worthless.

    January 12, 2012 at 4:08 pm |
  2. Guanxi

    Not China. They'll just put an end to easy credit to stop any bubble from bursting just as they did in the past. It's a socialist country that controls unwanted events, unlike liberal governments like the US. That's where the control of socialism shines.

    January 12, 2012 at 4:12 pm |
  3. Ian

    If that statement is true, are we saying Skyscraper Doom = Economic Boom?

    January 12, 2012 at 4:39 pm |
  4. sand

    why the US economy doomed badly after twin tower collapse

    January 12, 2012 at 4:48 pm |
  5. John

    There may be some correlation but lets put things in perspective. India and China have immensely dense population area's where building make economic sense. If you look at somewhere like Dubai, where a good percentage of buildings are high rises then the theory comes into play. If you take somewhere like India where there are literally 10,000s building sprouting up at the 5-10 story level then its a different story. 5-10 story buildings are generally considered the most cost effective design for urban environments. Manhattan went through the entire 1890-1930 period filling up with this size building. So to compare this massive development with 14 super high buildings is not a very good comparison.

    January 12, 2012 at 5:01 pm |
  6. Dan

    I like Ian's thinking.

    January 12, 2012 at 5:07 pm |
  7. chris

    I understand that the world's population is growing and that taller buildings are necessary, but do they have to be so damn ugly? All that anyone seems to think is; the taller the building is, the more Architecturally significant it is. This isn't true. Just because something is tall and coated in glass doesn't make it any more beautiful than a well designed 2-storey home, take for example WTC1, it's huge, but it's abysmally ugly and completely uninspiring. Don't get me started on Dubai either.

    January 12, 2012 at 6:44 pm |
  8. Dan in Missouri

    I vote for Ian as well!
    The west fears the China culture...but I think we underestimate their economic stability. My 401K is largely over there. Why? because the west has lost perspective that debt has to actually be paid off some day. When China was courted by Greece to lend them a little more future, They wanted more than just interest, they wanted assets. Smart! and a little scary they will be the banker of the future charging whatever interest they want, when all the bills come due.

    January 12, 2012 at 6:45 pm |
  9. Joe

    Given that this story only mentions a few countries, and ignores exceptions it's hard to know if there is any truth or if there are more exceptions to this than stated. (Toronto for example has the second highest number of skyscrapers in the world – yet most USA writers barely know Canada exists. Canada did relatively well during the economic crisis and given the huge oil production expansion in the west will likely continue to prosper even if there are more troubles).

    January 12, 2012 at 6:53 pm |
  10. Adam

    Correlation does not equal causation

    January 12, 2012 at 6:55 pm |
  11. aa

    what about hong kong, taiwan and singapore which are all doing really well. What a load of vodoo statistical lies

    January 12, 2012 at 7:49 pm |
  12. Lawrence Murray

    The tallest is not Taipei 101. It is Burj Khailfa in Dubai at 828 meters. Tapei 101 is only 508 meters and isnt even in the top 5. Ramy if you can't research the facts and even get this right what chance do you have to pass comment on other factors influencing skyscraper development. Poorly researched article.

    January 12, 2012 at 8:01 pm |
  13. Londonite11

    Haha. Some of these readers are real morons. Lawrence Murray is a poor reader – the author clearly writes the Burj is 828 meters in his article. Not only that the Taipei 101 is definitely the second tallest. It's called Google.

    January 12, 2012 at 8:17 pm |
  14. Jason

    Skyscraper height cannot predict downturns. See: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1970059.

    January 12, 2012 at 9:00 pm |
  15. Nick

    chris.....idk why u dont like the burj khalifa tower, i think it looks realy cool and different. i agree with WTC1 tough, i think a better design could have and should have been choosen.

    and lawrence.....did u actualy even read the article??? he stated burj khalifa is the tallest, and said the the tower of india would beat out taipei 101 for second. he is correct that taipei 101 is the second tallest in the world.

    January 12, 2012 at 9:35 pm |
  16. Morten Matras

    A skyscraper symbols great optimism, but is in reality a result of speculation and booming land prices. I really like this article because it takes a bit of the positive atmosphere away from the skyscraper as a symbol of progress.

    Just stay alert no matter how big the symbols of progress are – that's the conclusion I take.

    January 12, 2012 at 11:48 pm |
  17. Busuwa

    the bottom line of the artical, is the higher u go , the lower u get financially. skyscrapers are curse

    January 13, 2012 at 12:27 am |
  18. Rethink

    The author's point (not that it was his idea–this is an old, old claim) should be taken by everyone on a personal level. Be really careful of that big home or vehicle purchase. You never know when your life might take a downturn, making you wish you had spent more conservatively in the past.

    January 13, 2012 at 1:19 am |
  19. jun

    tower of babel lessons.

    January 13, 2012 at 1:35 am |
  20. Ed

    According to the above article, the Empire State building opened in 1938. "That was just as the Great Depression began to darken the U.S. economy. That lasted for more than 10 years." The Great Depression began in 1929 after the Stock Market Crash and ended as WWII loomed. Not in 1948 as the article implied.

    January 13, 2012 at 6:20 am |
  21. JC

    I just thought skyscrapers were built so that the rich can keep their noses clear of the s%^t stench of their industry.

    January 13, 2012 at 6:35 am |
  22. DhevanQlaw

    I agree with the writer’s analysis and thinking, however I do not believe that the financial leak in the world’s economics can be pinned on one factor (the building of skyscrapers). That being said, it is a sad situation when billions are invested into buildings only to realize later that the equity could have been better used elsewhere._13/01/12

    January 13, 2012 at 7:18 am |
  23. kilrwat

    Fun 'angels on the head of a pin' piece, but the Empire State building was built in REACTION to the Great Depression as a symbol of New York City's can-do spirit. 'course now we have WTC1 and all of the kerfuffle around that...

    January 13, 2012 at 12:56 pm |
  24. Big Bang

    It reminds me of the Tower of Babel.

    January 13, 2012 at 2:12 pm |
  25. www.talentedinternet.com

    http://www.talentedinternet.com you can visit here to know how to
    start your business.

    January 13, 2012 at 4:00 pm |
  26. Jim Brown

    @ Joe – Would you mind showing us your source on that? I currently live in Shanghai, and have spent a lot of time in Tokyo and Seoul. I've also been to Toronto. Even if 5 story buildings were considered skyscrapers, I still couldn't possibly imagine how what you said could be true. I love Toronto, and Canada (I'm Canadian) but there is a reason why everyone forgets us. Go to the cities I've just mentioned and you'll see how insignificant our economy is. Thank god for our oil!

    January 13, 2012 at 4:37 pm |
  27. Jim Brown

    wups – Londonite11 not Chris

    January 13, 2012 at 4:58 pm |
  28. Back To The Cave

    The hobbits got it right.

    January 14, 2012 at 1:19 pm |
  29. marc gunn

    I think this concept has some merit with the TALLEST building, but simply building lots of tall buildings doesn't count (afterall there is a huge difference between 240m and 800+, esp when you consider how densely populated some of those asian countries are)

    Also these concepts aren't worth much weight as they can't predict with any precision WHEN the downturn occurs as all things cycle and a downturn will eventually come so any one who says anything will appear correct in a very general sense but the same could be said about anything.

    January 14, 2012 at 2:48 pm |
  30. Daniel M Broe

    The writer needs to brush up on history a bit. The Empire State Building, which opened in 1931, was built deliberately as a response to the 1929 stock market crash and ensuing economic collapse. It was not a cause of depression. The building of the Empire State Building was no coincidence, but not in the way the writer appears to imply.

    January 14, 2012 at 3:42 pm |
  31. Focus 503

    In 2001 Jeremy Clarkson said the same thing about horsepower wars in cars, (but in reality was talking about an explosion of high money vehicles) that they always preceded an economic implosion. A fairly good prediction really. Once the "jobs creators" get on a roll, they usually burn it right to the end.

    January 14, 2012 at 4:09 pm |
  32. swohio

    –"The country already has half the world’s existing buildings higher than 240 meters – the minimum height for skyscrapers."–

    Sorry, but I really have to question this assertion that the minimum height for skyscrapers is 240 meters. That converts to 787' – and there are MANY "skyscrapers" in the world which are shorter than that. Or is that somehow the minimum height of new skyscrapers permitted to be built in China?

    January 14, 2012 at 7:04 pm |
  33. OrangeW3dge

    has anyone even watched the movie "2012"?
    Folks, the End Is Near...start building the boats

    January 15, 2012 at 1:58 am |
  34. OrangeW3dge

    Did anyone mention the King of Babel?

    January 15, 2012 at 2:00 am |
  35. electrickid 101

    As long as the united states keeps sendin all its money and resorses to china they will b able to do what ever they want. Everything we consume is built in china by a conscript people. And untill the government forces corperations to bring industry back here we will be in a depression.

    January 15, 2012 at 1:10 pm |
  36. Texas Coyote

    If anyone asks yet again, why the OCCUPIERS all over the United States are protesting. Listen up!
    “You control our world. You've poisoned the air we breathe, contaminated the water we drink, and copyrighted the food we eat. We fight in your wars, die for your causes, and sacrifice our freedoms to protect you. You've liquidated our savings, destroyed our middle class, and used our tax dollars to bailout your unending greed. We are slaves to your corporations, zombies to your airwaves, servants... to your decadence. You've stolen our elections, assassinated our leaders, and abolished our basic human rights as human beings. You own our property, shipped away our jobs, and shredded our unions. You've profited off of disaster, destabilized our currencies, and raised our cost of living(while lowering our wages). You've monopolized our freedom, stripped away our education, and have almost extinguished our flame. We are hit...we are bleeding... but we ain't got time to bleed. We will bring the giants to their knees and you will witness our revolution! WAKE UP AMERICA! SUPPORT OCCUPY!

    January 15, 2012 at 2:52 pm |
  37. Michael

    Ed, the auther does not say that the Empire State Building opened in 1938. He is just referencing when the photo was taken.
    We were recently in Shanghai and wrote about the tremendous growth taking place there, and I do believe it's a bubble: http://www.changesinlongitude.com/world-tallest-buildings-shanghai-world-financial-center-jin-mao-tower/

    January 15, 2012 at 4:17 pm |
  38. Patrick

    Skyscrapers: A bit of a city hood ornament, produced by economic engines.... The commercial building economy (i.e. skyscrapers) is never in real-time, so it is coincidence, not an omen ... I agree, the 1938 wording is misleading, correct, but misleading. FYI: the Empire State Building had an extremely high vacancy rate for years after completion.

    January 15, 2012 at 6:14 pm |
  39. Charlie Whiskey

    Fallacious thinking. Post hoc ergo propter hoc, meaning "after that therefore because of that". When economic downturns occur, less large buildings are built. So for thousands of years of history you will repeatedly be able to find some peak of economic prosperity with some largest building built, followed by an economic downturn during which no large buildings are built. It is economic downturns which cause the skyscrapers to cease being built, not skyscrapers being built causing an economic downturn.

    January 15, 2012 at 7:05 pm |
  40. tingle

    You build apartment complexes to house people who have been foreclosed upon. They are built by people who own smaller ones who have rented all available space.

    you build things like this cause you are expecting people to lose houses and need to move into them.

    January 15, 2012 at 11:08 pm |
  41. Joe Switzerland

    I think the author of the book, Andrew Lawrence, is merely making a statement about society and not claiming a direct correlation between tall buildings and economic crisis. “Skyscraper construction is characterized by bursts of intense activity with easy-to-get credit, rising land prices and excessive optimism. But by the time those skyscrapers are finished, the economy has slipped into recession." The buildings are a symptom of other factors that tend to lead to economic downturn: uneven bursts of economic activity, easy-to-get credit, rising land prices, and blind optimism. Would this theory hold up as a PhD dissertation? Probably not. What is does do though is help us to re-think our idea of progress.

    January 16, 2012 at 9:52 am |
  42. Claude Lovell

    The point this story is trying to make is absurd. The great depression had exactly ZERO to do with the construction of the Empire State Building and the Asian Economic Downturn had ZERO to do with the building of the Petronis Towers. China and India are rapidly developing countries where the office space is needed and to say that their economies face economic ruin because they're building office space is just tripe.

    Even the story's contention that skyscraper booms are cause by free and easy credit seems silly to me. The booms in China and India are happening now when credit is as hard to get as it has been in decades.

    My advice... stick with the news. This kind of filler is just ridiculous.

    January 17, 2012 at 8:18 pm |
  43. eman

    Beware of entry impaired Algulwowob hard horror


    January 27, 2012 at 1:14 am |
  44. Wait a minute...

    Periods of increased global warming are the same periods as a decrease in pirates.
    Should we get more pirates to combat global warming?


    January 27, 2012 at 5:49 pm |
  45. german

    Woah this weblog is wonderful i love reading your posts. Stay up the great paintings! You know, a lot of persons are looking round for this info, you can aid them greatly.

    May 9, 2012 at 2:42 am |
  46. filipino love

    Fantastic points altogether, you just received a new reader. What may you suggest in regards to your put up that you simply made some days ago? Any positive?

    May 9, 2012 at 6:42 am |
  47. find love love

    Wow, wonderful blog format! How long have you ever been blogging for? you made running a blog look easy. The total look of your website is great, as smartly as the content material!

    May 9, 2012 at 9:58 am |
  48. delicious.com/thetvshield

    I am extremely impressed along with your writing abilities and also with the layout to your blog. Is this a paid theme or did you modify it yourself? Anyway keep up the excellent high quality writing, it is uncommon to peer a great blog like this one these days..

    July 1, 2012 at 3:04 pm |
  49. how can make money blogging

    I got useful information from your article.

    November 15, 2012 at 4:24 pm |
  50. longines replica

    You can enjoy wearing them at your own taste and to suit the expectation of different women, the company strives to hire the best designers at work
    longines replica http://www.fakewatchz.com/replica-longines-watches-on-sale-cb43.html

    November 28, 2012 at 8:31 am |
  51. louis vuitton replica watches

    This Christian Louboutin items replica to shift easily and fall on the significant elements in the scenario of the style display at best
    louis vuitton replica watches http://www.fakewatchz.com/replica-louis-vuitton-watches-on-sale-cb44.html

    November 28, 2012 at 8:31 am |
  52. Southworth

    The shades appeared instantly, however are something special for for Christmas time. I will discover further should they are commenced.
    Southworth http://tastethetraditions.com/?p=2028

    January 23, 2013 at 3:57 am |
  53. cheap jordan shoes for sale

    Everyone knows statistics are vital. cheap jordan shoes for sale http://www.grandhoteltiziano.it/hotel/camere-classic.html

    June 2, 2013 at 8:41 am |
  54. samsung????

    Your style is extremely distinctive in comparison to other people I've read stuff from. I appreciate you for posting when you have got the opportunity, Guess I'll just book mark this blog. samsung???? http://www.powerbankdigital.com

    June 21, 2013 at 1:05 pm |
  55. ??????

    *hi!,I like your creating so much! share we keep up a correspondence extra approximately your post on AOL? I require a specialist on this area to solve my problem. Might be that is you! Looking ahead to peer you. ?????? http://www.powerbankland.com

    June 21, 2013 at 1:16 pm |
  56. techno man

    Barclays bank is da Best in ibiza seasons


    July 5, 2013 at 6:59 pm |

Post a comment


CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.

About Business 360

CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.

Powered by WordPress.com VIP