Developers Defy Gravity, Government Policy

Sina.com

Sina.com was one of many websites reporting on the birth of Beijing’s newest “land king,” as Citic Group bid 6.3 billion yuan for a plot of land in the Central Business District. Citic plans to build a 500-meter skyscraper on the site.

Global politicians envious of the power China’s leaders supposedly have to implement economic policy would do well to consider Z15.
A plot of land in Beijing’s Central Business District that recently went up for auction, Z15—along with neighbor Z14—has been the subject of a considerable speculation in recent months as authorities have scrambled to control the country’s swelling property market. Would tightening credit and the prospect of new taxes at last put a stop to a bubbly series of record-setting land auctions in top-tier cities? The answer would seem to be no.
Of three companies in the running to win rights to develop Z15, Xinhua reported Wednesday (in Chinese), state-owned Citic Group has emerged victorious with a record-setting—and jaw-dropping—bid of 6.3 billion yuan, or roughly $950 million. The successful bid makes Citic the latest in a string of what Chinese media refer to as “land kings.”
Local media are reporting that Citic plans to use Z15 as the site for a gleaming 500-meter skyscraper (see artists rendition above). Once built, the tower will be Beijing’s tallest–eclipsing the recently completed China World Trade Center Tower, also in the Central Business district, by 170 meters.
Beijing is not the only Chinese city that can look forward to having its skyline remade by a gravity-defying structure. The capital of central China’s Hubei Province, Wuhan, is poring over plans for a five-billion-yuan, 606-meter tower called the Greenland Center, according to Xinhua. If completed, it would be the world’s third-tallest building.
Meanwhile, what is expected to be the world’s second tallest building is already under construction in Shanghai. The 15 billion-yuan Shanghai Tower, scheduled for completion in 2014, will top out at 632 meters and feature the world’s highest hotel.

Associated Press

Construction has begun on the $2.2-billion Shanghai Tower, expected to be the world’s second-tallest building when completed in 2014.

These ostentatious projects, and their equally exaggerated budgets, come at a time when Chinese leaders are trying desperately to contain skyrocketing property prices out of fear of an asset bubble and rising public frustration over the cost of housing. In recent months, the government has raised interest rates, increased down payments and discussed implementing new property taxes, all in an effort to cool the market.
Despite those measures, housing prices in large- and medium-sized cities have continued to rise, climbing 0.3% percent from October to November and 7.7% year-on-year.
“While the tightening measures have been pretty severe, everyone is still fairly bullish on the real estate market,” Zhao Song, head of the pricing department in China’s Ministry of Land and Resources, told local reporters after the sale of Z15. “Since the beginning of the year, people knew we’d have a new land king here, even though the government came out with all these new policies, even though there were orders not to allow another land king.”
While none of the new projects are likely to have a direct impact on housing prices, China’s citizens may well wonder whether public resources—two of the three skyscrapers are being developed by state-owned companies—aren’t better spent on something a little more practical than architectural shock and awe. More affordable housing, perhaps?
–Josh Chin