» 01/11/2012 18:51 ASIA Building skyscrapers is a sign of economic crisis A research conducted by Barclays Capital shows the link between the "gigantism" in periods of financial recession and buildings of a country. Today China holds the record in construction, with 53% of the world, followed by India. But property values could drop by up to 20% in the coming months.
Beijing (AsiaNews / Agencies) - A research conducted by Barclays Capital reveals a "sinister correlation" between the construction of skyscrapers and multi-storey buildings, with a succession of economic crises that affect a nation. Some might see the similarities with the Biblical story of the Tower of Babel, recounted in Genesis. For the experts, the policy of property "gigantism" is a symptom of a sick system characterized by an "incorrect allocation of capital." Moreover, the recently published report Skyscraper Index, by the British investment bank, confirms the suspicions with some striking examples: the creation of the Empire State Building in New York, USA during the Great Depression of '29, to the opening of the Burj Khalifa in Dubai, the largest building in the world, in conjunction with the Emirate’s disastrous financial bubble of the.
Barclays Capital says that the first skyscraper in history, the Equitable Life in New York, was completed in 1873, while the U.S. economy recorded a five-year recession. The building was demolished in 1912 but, increasingly in the United States, fared no better with the Willis Tower in Chicago in 1974, which coincided with the oil crisis and the abandonment of the fixed rate for the U.S. dollar and gold. As for Asia, the first buildings that took on the skies were the Petronas Towers in Malaysia, completed in 1997, the year in which the continent experienced the greatest economic crisis in recent history.
In the last decade, Beijing and New Delhi are contending for the supremacy in the construction of skyscrapers and towering buildings to the tune of billions of dollars. From the current 75, China will reach 141 skyscrapers by the end of 2017. And recently, India has launched a series of projects that they intend to compete in the second world economy. Investment bank analysts explain that "if history does not lie", the Chinese and Indian real estate boom is a mere reflection of a "wrong allocation of capital", which could result in a "correction" in the next five years.
The major concerns of investors are focused around China, which now builds 53% of the total number of skyscrapers in the world. For there are real risks of a collapse in property prices - up to 20% - which will shroud the main cities of the country within the next 12/18 months. Besides, in a long article published yesterday AsiaNews reported on the fragility of the Chinese economy, whose development model is doomed to collapse together with the American financial system (see AsiaNews 10/01/2012 China’s economy, as sick as that of the US).
