Scaling New Heights.(Architecture)(Minoru Mori on the impact of the Shanghai Financial Center tower on Sino-Japanese relations)(Interview)

Byline: Duncan Hewitt

Developer Minoru Mori discusses his new tower in Shanghai and its impact on Sino-Japanese relations.

The 101-story, 492-meter-high Shanghai World Financial Center finally opened its doors last week, becoming the world's second tallest building after Taipei 101, which has a lower roofline but a higher spire. Designed by New York architects Kohn Pedersen Fox, it contains not only premium office space but also the world's highest hotel, the Park Hyatt Shanghai--and dwarfs China's former tallest building, the 420.5m Jin Mao Tower next door. The project is the brainchild of leading Japanese property developer Minoru Mori, president and CEO of Mori Building Co., Ltd., and the man behind Tokyo's celebrated Roppongi Hills development. He first conceived the idea of the Shanghai project 15 years ago, and has remained committed to it ever since, despite years of delays caused by the Asian financial crisis in the late 1990s, as well as anti-Japanese sentiment that led to a change in the building's design. He spoke to NEWSWEEK's Duncan Hewitt in Shanghai. Excerpts:

Hewitt: what gave you the idea for this project back in the early '90s, when Shanghai's modern development had barely begun?

Mori: When I came here in 1993 Shanghai really felt like postwar Japan: everyone was dressed in drab clothes, there were a lot of bicycles. But I felt this was the place to invest. I visited many different cities--including Moscow, Jakarta, Ho Chi Minh, also Shenzhen in southern China--but we settled on Shanghai. I knew that Shanghai was the center of Asia before World War II, for finance but especially for trade. It was a larger center than Tokyo -- and so I felt that once the system turned from communism to capitalism, Shanghai would certainly come back onto the world scene.

What did people say when you went back to Tokyo and told them you were going to build in Shanghai?

Generally the Japanese were very sensitive to the risk represented by China, including the political risk. I knew that reactions would be rather difficult and negative back home. So I had the idea of making this project part of the official development assistance from Japan to China. I approached the president of the Overseas Economic Cooperation Fund, and they agreed to gather about 70 percent of the equity portion, and Mori Building was to take up 30 percent. So the funding was partly public-- and I think that's how China authorized this.