By Helen Leavey In Taiwan

Construction of a 500-metre tower block in Taiwan's capital, Taipei, is going full-steam ahead, despite concerns there are already too many offices in the city.

The total supply of office buildings in Taiwan is now higher than the demand because of the bubble economy in the past decade Economics professor Chen Po-chih

Taipei 101 will be the world's tallest building, combining offices, shops and recreation areas, according to the developers.

Taipei's city government is hoping the tower will become the centre of a new service and financial area already growing up around the building.

But with concerns over the health of Taiwan's economy, some think the building will flood the city with office space.

"The total supply of office buildings in Taiwan is now higher than the demand because of the bubble economy in the past decade," said economics professor Chen Po-chih.

Filling up

"The area of Taipei 101 is a new developed area, therefore we can expect many businesses will move to that area and other areas of Taipei city will face more difficulties," he said.

Rising at the rate of one floor every six days, Taipei 101, which will cost $1.8bn to build, is already more than two thirds of the way up.

And the developers - not unexpectedly - are confident all the pieces of their jigsaw will fit together.

They say the building's shopping mall, which will open next September, is almost full.

And they say they are sure they will fill the main office tower, due to open late 2004.

Luring investors

The Taiwan stock exchange has already signed up for several floors.

Taiwan is prone to major earthquakes

Developers even dismiss the threat of terrorism, saying Taiwan is not a realistic target.

Some analysts were also optimistic about the project.

"I think it's going to be encouraging for more investment, not just in terms of multi-nationals or large Taiwanese companies setting up offices but in terms of other developers seeing what can be done," said building consultant Joanne Jocz-Kao.

"We see this tower not just enhancing the skyline but raising the bar a notch higher," she said.

Strong foundations

There have been other worries about the project, as well as the fears about a lack of demand for offices.

Chief among those problems is that Taiwan is prone to major earthquakes.

A few months ago a quake killed five people when two cranes fell from the building, but project president Harace Lin is not worried about future earthquakes.

"This building is designed to withstand the biggest earthquake in 2,500 years cycle," said Mr Lin.

"Our foundations are very special and are down into the ground 80 metres deep."

But Taipei 101 may have more to fear from economic shocks than from seismic ones.