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China doesn't foresee an Olympic hangover
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China's economy won't suffer from the post-Olympics decline that has plagued some countries because Beijing represents only a small part of China's gross domestic product, analysts said yesterday.

Even so, the country's economy is set to slow for other reasons in the third quarter, mainly the result of macroeconomic controls imposed to rein in excess growth.

"China's economy will continue to ease for the rest of this year, but it has little to do with the end of Beijing Olympics," said Zhang Xiaojing, an economist at the Chinese Academy of Social Sciences. "The slowdown in economic expansion is in line with macroeconomic polices, not a post-Olympic syndrome."

Host countries often benefit from rapid investment growth before an Olympics and lose momentum afterwards.

For example, Japan's economy slowed from 13.1 percent in 1964 when it held the Tokyo Olympics to 5.2 percent the next year. Similarly, South Korea's economy slipped to 6.7 percent from 10.6 percent in 1988 when the Seoul Olympics took place.

The Unites States was a rare exception as its economic growth quickened to 4.5 percent from 3.7 percent after hosting the 1996 Atlanta Olympics.

"The economic influence of the Olympics is notable for Beijing. But as the city accounts only for a small proportion of China's GDP, the Olympics will have limited impact on the country's overall economy," Zhang said.

Unlike Seoul and Tokyo, which accounted for 27.7 percent and 26.3 percent of the economy of South Korea and Japan, Beijing's output contributed only 3.6 percent to China's total economy.

The situation here is closer to that in the US, where Atlanta's output constituted 1.9 percent of total US GDP.

China's economy is likely to ease to around 9 percent by the end of this year from 10.4 percent in the first half, said Li Maoyu, an analyst at Changjiang Securities Co.

"It is not a byproduct of the Olympics but the expected result of China's tight credit control in the previous months and a weaker global economy," Li said.

(Shanghai Daily August 26, 2008)

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