The Olympic Games, arguably the greatest sports showcase in the world, have in the past presented their host countries with business opportunities galore. However, past experiences also chart the economic hit taken by some host countries after the initial spike ends. With its own Olympics coming next year, will China face such torpor? Li Yining, one of the nation's leading economists, doesn't think so.
Li, the dean of Peking University's Guanghua School of Management, listed three reasons for the economic downturn seen in previous Olympic lands.
The first was a lack of industries accompanying the Olympic phenomenon. Li said, "The Olympic Games are in itself a sort of resource through which money can be made. However, just as a resource-dependent city will suffer once its resources are exhausted, a host country will face the same problem after the Olympics if it has not catered to follow-up industries."
Secondly, Li addressed the implementation of new investment opportunities, saying that to see the economy simmer down after the Olympics are over is natural but that this can be limited through judicious new chances being offered to investors.
Finally, Li put forward the rise in unemployment. Since many of the jobs generated by the Olympic Games are temporary in nature, many workers may nervously see the closing ceremony approach since it might see them cast adrift once again into the job market.
However, Li stated that China would not be troubled with such problems, and sought to play down a possible post-Olympic decline.
"China will not need to worry about the lack of new investment spots after the Olympic Games," Li is confident.
Li based these views on China's recent annual economic growth rate of 8 to 10 percent. Since this success has been seen outside Olympic times, and has been helped by continuous investment, private sector growth and expanding domestic demand, it will continue after the Olympics are over, explained Li.
"A big project cannot be finished in one year. Once started, it needs continuous investment. The government's continuously large investment in infrastructure has fueled the nation's economic growth. Besides this, private sector is catching up with its strong growth momentum," Li said.
"China is also seeing mounting demand from urban and rural residents. Increasing demand can be seen for housing, tourism, education, healthcare and durables such as cars," Li continued.
Another favorable factor is China's comprehensive quest to up its ecological standards by making fixed assets more environment-friendly, making this another bonus boosting the country's economy, Li said.
High-tech industry and its investment potential were also singled out for praise by Li. "What is the new economy?" Li asked, "New economy results in a melding of innovation plus the capital market. The development of the capital market will in turn boost that of high-tech industry. The overall development of new energy, bio-technology and new materials coupled with research and creation of new electronic products will naturally help attract investment."
Addressing unemployment, Li did not expect the problem to unduly affect China.
"The companies working on building the Olympic sports venues and facilities will gain fame, opening them to getting new contracts after the Games and keeping staff on for said contracts. These workers will possess new skill-sets, making them highly sought after," said Li.
Turning to similar concerns among financial and electronic information sectors, he pointed out that these areas of employment are currently facing a shortage of professionals, making it unlikely that those trained specifically for the Olympics will be laid off.
Li admitted job prospects would suffer in sectors such as tourism, retail, accommodation and catering as demand for these services will decrease. However, as long as Beijing remains a hot tourism destination, this will pick up again.
Li pointed out the toughest challenge could be the post-Olympic uses of the venues. These could find themselves left idle after 2008 if plans are not made.
To avoid this, BOCOG has implemented a number of precautious measures in their planning. These cover many angles including: the Olympic venues will help improve city functions, including venue selection, layout, and interior designs; sports function will be transformed by combining them with other facilities, allowing them to double up as international conference centers or serve specific purposes such as becoming bodybuilding and leisure facilities.
(China.org.cn by Yuan Fang March 22, 2007)