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TheStreet Open House

Hollow But Lucrative Race for World’s Tallest Building in China

TAIPEI, Taiwan ( TheStreet) -- High towers planned for inland China's major hub city would stand above every other building in the world, but a project one province to the south may get there first -- unless it's beat out by some other Chinese developer.

In a county that wants to remind the world of its economic power and where the facade means face, 71% of the world's super-tall office towers will rise in China during the next five years despite questions about demand, real estate services firm CBRE China says.

More than half of Asia's five-year supply of buildings over 300-meters (984 feet) high would be in China's second-tier cities, which are outpacing China's economic growth of about 7%, it adds. That's 132 new towers.

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"What happens in the major cities influences second- and third-tier cities, so while we haven't seen something on the scale of the others, there is desire," says Scott Kronick, an author, 20-year Beijing dweller and Asia-Pacific CEO at Ogilvy Public Relations.

Whether anyone wants to buy an office in the clouds and smog of urban China is the developer's problem. But if all these projects go forward anyway -- and a lot of them will -- they will inevitably bring income to the construction industry, from basic materials to elevators.

That trend means tall times ahead for the Singaporean and Hong Kong property developers who have invested in China for 15 years, leaving Western peers behind.

But a Western company such as Honeywell (HON), which has already invested $1 billion in China, might suddenly win a bid for 100 floors' worth of security systems.

Imagine the height of an elevator for the likes of Otis Elevator Co., a subsidiary of United Technologies Corp. (UTX). Otis has already built interior transportation for some of the world's highest towers.

Chinese authorities are leaning on developers to build stuff that doesn't add to its notorious air-pollution problem.

Those who take the call seriously might add orders to China-based, Nasdaq-traded Suntech Power Holdings (STPFQ), the world's largest solar-panel maker.

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