Beijing Olympics Stirs World Business

Seven years from now, a very special event will take place "somewhere" in the world. Now, that "somewhere" has been decided -- Beijing.

The International Olympic Committee picked Beijing over Paris, Toronto, Istanbul and Osaka, the markets may jump, experts say - especially for those companies associated with China or the Olympics, or both.

That's because a Beijing Olympics is expected to have a major influence on the country's economic development over the coming years, as well as the many companies trying to tap its attractive market of 1.3 billion consumers.

US investment bank Goldman Sachs says it estimates a Beijing Olympics would boost China's gross domestic product by 0.3 percent per year from 2002 to 2008.

"Hosting the 2008 Olympic Games would bring long-term permanent benefits to China," Goldman Sachs economist Fred Hu said.

The first Chinese Olympics in history will prompt the country to embark on a huge infrastructure spending spree. Things that need to be done include constructing sports facilities, housing, roads, airport terminals, transit railways and telecom infrastructure and launching projects to reduce industrial pollution.

Such an effort will cost US$20 billion, according to a recent report by Credit Lyonnais Securities Asia.

Stock market watchers say many speculators are snapping up any stock with "Beijing" in its name in hopes of profiting from a potential spending boom.

Local businesses such as developer China Resources Beijing Land, tourism software firm TravelSky Technology and Beijing Capital Airport have all risen by nearly a third in the past three months.

The IOC's big sponsors, like Coca-Cola, Eastman Kodak and McDonald's, also stand to gain from the Beijing Olympics.

Not only are they already heavily invested in the 2008 Games, but also they are among the handful of American companies that have made a successful investment in China.

However, others have cautioned against speculation.

Joe Zhang, China analyst at UBS Warburg in Hong Kong, said that "a lot of hot air" was causing stocks to rise.

He added that Olympics plays were "a very wrong way of investing" in China's growth story.

Jun Ma, economist with Deutsche Bank in Hong Kong, also warned that not all stocks associated with Beijing would be profitable. "Benefits may be distributed very unevenly," he said.

Even IOC marketing commission chief Dick Pound played down the market promises.

Referring to the big-name Olympics sponsors, he said, "their numbers will be the same whether it's China or Toronto."

( 07/15/2001)

In This Series

Beijing: A City of Expectation and Confidence

Beijing Goes All Out in Final Olympic Bid

Greenpeace Supports Beijing Olympic Bid

Beijing Residents Learning English for Olympic Bid

World Olympians Meet in Beijing

Reuter Poll: Beijing Will Win 2008 Olympic Bid

Olympic Bid Gains Support Overseas

Taiwan Supports Beijing's 2008 Effort

Beijing's Olympic Spirit Pursuit Will Go on

Beijing, Paris, and Toronto Equals for 2008 Olympics

Russian Association Backs Beijing's Olympic Bid



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