As the 2008 Beijing Olympics ended in a splendour of fireworks, concerns over a post-Games downturn in the Chinese economy re-emerged.
History shows that some host countries – Japan and South Korea, for example – experienced post-Olympic declines in investment.
Japan witnessed a drastic fall in growth the year after the 1964 Games, down to 5.2 per cent from the previous year’s 13.1 per cent. South Korea saw the rate slip from 10.6 per cent to 6.7 percent in 1989.
Will the Chinese economy follow the same pattern?
Beijing city’s gross domestic product (GDP) was expected to register average annual growth of 11.8 per cent from 2005 to 2008, as the city invested for the Games, said Chen Jian, the Beijing Olympic Economy Research Association deputy head.
The expected growth was 0.8 per cent higher than the average rate for the five-year period from 2001 to 2005.
Chen said investment for the Games drove the city’s growth by the biggest margin in 2007 – 1.14 per cent.
Official statistics showed organizers had spent $1.9 billion on construction of venues and another $43.8 billion on urban infrastructure, such as transport and environment.
About 1.5 million new job opportunities were created from 2005 to 2008.
Other host cities, including neighbouring Tianjin and Qingdao, also reported higher growth as they geared up for the Games. The sailing events in Qingdao helped boost regional economic growth by 0.8 per cent annually.
While hosting the Games had a positive impact on the economy, its leverage on the national economy was limited.
Beijing’s gross domestic product (GDP) accounted for less than four per cent of the country’s total, and Olympic-related factors were not major forces behind the growth in host cities to make a difference after the Games.
The annual investment by Beijing for the Olympics represented only one per cent of the country’s total from 2002 to 2007, according to statistics.
About 718,300 square meters of Games-related construction was completed in 2007, just 0.0139 per cent of the country’s total.
Zhang Xiaode, a China National School of Administration professor, described the impact this way: “If the Chinese economy is measured at a scale equal to the sea, the impact of a frog jumping into the sea can almost be ignored.”
A JPMorgan Chase report said the Chinese economy was not likely to slow in the post-Games period, arguing that host countries of large economies that enjoyed fast growth are not vulnerable to such impact.
Justin Yifu Lin, the chief economist and vice-president of the World Bank, had long held China would face no post-Olympic recession. The size of the economy dwarfed the investment on building venues and infrastructure for the 2008 Beijing Olympics, he said in May.
The country has plenty of investment prospects as it is to host the World Expo in Shanghai and the Asian Games in Guangzhou in 2010, among other international events.