For three decades the number of tall buildings over 200 meters – roughly about 70 stories – were built in China at a breakneck pace, in some years becoming over 50% of the total world output of skyscrapers. But in the past year, the number of building completed, due to a sharp fall in demand and some changes enacted by the government, buildings are now being completed at a slower pace, with 40% fewer being finished in 2019. The Tainjin CTF Finance Center, now the eighth highest in the world is not completed but has a vacancy rate of 44% – this means trouble for future buildings. And while lower demand is driving this industry, the government is guiding permits from the coastal areas where population is dense to the rural areas to spead the masses and usher inland to smaller towns.
Apparently the government is becoming concerned about the size of buildings and the concentration in some of the larger cities. The president, after taking over six years ago, has openly admitted that the building boom must be controlled and that the construction of very tall buildings must end as they are “oversized, xenocentric, weird” as he put it. Xi Jinping has both domestic and international pressure that is of course the US-China trade talks and of course the “hawks” within the party who are ready to stand up and fight for all trade points with US President Donald Trump. We have put together some pieces on this platform that point to slower China growth to 6.2% for this year and slower for 2020. The building boom is not dead but it is slowing and will likely grow at a more sustainable pace as even now, 50% of all high rise buildings being constructed are in China.