Shanghai to break ground on new tallest building

Construction projects are grinding to a halt as financing runs dry elsewhere in the world, but in China's biggest city, they are still going strong.

On Saturday, Shanghai officially began work on what will become its tallest skyscraper - a 2,073-foot (632-meter) tower in the city's Lujiazui financial center that will tower over the current highest building, the recently completed 1,614-foot (490-meter) Shanghai World Financial Center.

While China's economy is slowing and exporters are feeling the pinch, the sinuous glass building - to be called the Shanghai Tower - is one of a slew of government-funded construction projects that authorities are using to stimulate growth and create jobs.

"Launching construction at this time will help boost Shanghai's confidence in fighting the financial crisis," Gu Jianping, manager of city-owned Shanghai Tower Construction & Development Co., declared to reporters in Shanghai.

Beijing plans to spend 18 trillion yuan ($2.6 trillion) in 2009 alone to help blunt the impact of the global financial crisis, using the immense capital accumulated over years of double-digit economic growth and booming exports to build railways, roads, airports and electricity networks.

Although Shanghai has seen its overheated real estate market cool, prices have not fallen dramatically. Government-backed purchasing and interest rate cuts appear to be stabilizing the market, although some developers may be headed for trouble.

Meanwhile, the city is doing its part to catalyze growth. A massive subway construction effort blocks many city streets; the waterfront Bund is getting a complete overhaul and construction of the Expo zone, also along the rusty, neglected banks of the downtown Huangpu River, is going full steam.

"This is a wonderful time for this project to start," says Arthur Gensler, chairman and founder of San Francisco-based Gensler Architecture, Design and Planning Worldwide, which designed the 120-plus floor structure that is due to be completed in 2014 at a cost of more than 14.8 billion yuan ($2.2 billion).

Slumping demand has pulled prices for construction materials such as steel down by some 30 percent, he said in an interview Friday. By the time the project is completed, its developers are counting on a rebound in demand for office space.

Given the slowdowns elsewhere, the project couldn't come at a better time for Gensler.

"Times are tough," he says, ticking off place after place where projects are on ice. "A lot of projects are in a holding mode until financing gets sorted out," he said.

Shanghai has planned to build this building in its Lujiazui financial district since the early 1990s. But bidding on the project wasn't held until 2006, after the height of the Shanghai World Financial Center - developed by Japanese property tycoon Minoru Mori - had been set.

This newest, tallest building is meant to be the pancake-flat city's crowning landmark. It will tower over Mori's wedge-shaped building and the silvery, pagoda-like 1,381-foot Jinmao Tower next door. Together, the three pinnacles will dominate a skyline prickling with skyscrapers.

Despite the city's evident determination to ensure its most prominent symbol is Chinese-owned and financed, the structure is designed to maximize business returns given the amount of space available, its designers say.

"I don't think it's just pure ego," said Jun Xia, the Shanghai-born architect credited with designing the building's wind-diffusing, 120-degree spiral shape. "This building reflects the land's value," he said.

Aiming for a "sustainable" green building might appear an extravagance given the strains of the financial crisis, but Gensler and his team say their design reaps significant savings in heating and cooling costs through a "double skin" that creates a series of insulating atria between the building's core and its outer glass wall.

Rainwater caught on the building's funnel-shaped roof can be stored and used to flush toilets, while wind turbines will help provide enough electricity to power the building's outer lighting.

Gensler says the Shanghai Tower is the kind of project that, for now, can only be found in places like China and the Middle East because everywhere else business is slowing. Dubai, for instance, is home to the under-construction Burj Dubai, which was reported to have surpassed 2,257 feet and will eventually be more than 3,281-feet (1 kilometer) tall when done.

"They want unique, one-of-a-kind projects," Gensler said, adding, "China is a wonderful market. It will be one of the world's great opportunities for the next three to five years."