2008 Olympics & China


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2008 Olympics & China

  2. 2. The Olympics and China's Socio-Economic Development
  3. 3. Outline <ul><li>Why Host the Olympics – pros & cons </li></ul><ul><li>Bidding for the Olympics </li></ul><ul><li>Background on China's Bid </li></ul><ul><li>Beijing Olympic Action Plan </li></ul><ul><li>Phases of the Beijing Games </li></ul><ul><li>Benefits – Immediate & Long-term </li></ul><ul><li>Post-Olympics </li></ul>
  4. 4. Why Bid for the Olympics <ul><li>Opportunity for emerging power to promote their country as developed and prosperous </li></ul><ul><li>Either applying for hosting of the Games, or the actual hosting will help promote the city's “open-up commitments”, economic development and social progress </li></ul><ul><ul><li>New international markets, and increased internal and external consumption in expanding global marketplace </li></ul></ul>
  5. 5. Why Bid for the Olympics <ul><li>BEFORE </li></ul><ul><li>New infrastructure </li></ul><ul><li>Industry development </li></ul><ul><li>DURING </li></ul><ul><li>Revenue </li></ul><ul><li>Tourism </li></ul>
  6. 6. Why Bid for the Olympics <ul><li>AFTER </li></ul><ul><li>Economic regeneration </li></ul><ul><li>Tourist interest </li></ul><ul><li>Political & Social Impacts : </li></ul><ul><ul><li>Nation-building, legitimization of govt position, pride & marketing for the country, foreign policy objectives </li></ul></ul>
  7. 7. Effect of Games w/ Past Hosts <ul><li>Based on past history, the host country experiences a decline in GDP growth a year after the games </li></ul><ul><li>By the time the Beijing Olympics commences, the cities of Montreal (1976), Barcelona (1992), Sydney (2000), and Athens (2004) will still be paying off debt incurred from hosting the previous Games </li></ul>
  8. 8. Bidding for the Olympics <ul><li>To become a host city, the bidding city must submit its proposal to the IOC or the International Olympic Committee </li></ul><ul><li>Factors considered range from ability to engage in massive infrstructure projects to macropolitical questions about the messages that the selection of the city creates </li></ul><ul><li>Selection of host cities has served 2 functions: graduation and rehabilitation </li></ul>
  9. 9. China's Bid for the Olympics <ul><li>Olympism has unrealized potential in the Orient world </li></ul><ul><li>When China competed in the 1984 LA Games in 1984, the PRC called a press conference and announced its intent to host the Games in 2000 </li></ul><ul><li>In 1993, China lost its hosting bid to Sydney by 2 votes </li></ul>
  10. 10. China's Bid for the Olympics <ul><li>In response to failed bid, China accelerated its economic growth, expanding at a faster growth rate than any other East Asian nation </li></ul><ul><li>In 2001, China again submitted its bid </li></ul><ul><li>The 2008 Beijing Olympics will facilitate implementation of the 10 th “Five-year Plan” and the “Strategy of Three-phased Development” for Beijing </li></ul>
  11. 12. 8 Broad Areas Affected <ul><li>Transport & traffic </li></ul><ul><li>- subway capacity airport terminal </li></ul><ul><li>Technology & information </li></ul><ul><li>Cultural & sports industry </li></ul><ul><li>Environmental improvements </li></ul><ul><li>Tourism $5.6 billion </li></ul><ul><li>Wholesale & Retailing </li></ul><ul><li>$1.8 b </li></ul><ul><li>Real property </li></ul><ul><li>Architectural industry </li></ul><ul><li>$500b = 80,000 jobs </li></ul><ul><li>- 19 venues </li></ul>
  12. 13. Beijing Olympic Action Plan <ul><li>3 CONCEPTS </li></ul><ul><li>1) Green Olympics </li></ul><ul><ul><li>Prioritized environmental protection in planning, designing & construction of Olympic venues and facilities </li></ul></ul><ul><ul><li>Includes strict ecological environment standards and systematic supporting systems in the environmental treatment, afforestation and beautification of both urban and rural areas </li></ul></ul>
  13. 14. Beijing Olympic Action Plan <ul><li>3 CONCEPTS </li></ul><ul><li>2) High-tech Olympics </li></ul><ul><ul><li>Adopting the latest available high-tech innovations during the Games </li></ul></ul><ul><li>3) People's Olympics </li></ul><ul><ul><li>Popularize Olympic spirit, promote traditional Chinese culture, as well as friendliness and hospitality of its citizens </li></ul></ul><ul><ul><li>Bridge for cultural exchanges to deepen understanding and enhance trust and friendship among different nationalities </li></ul></ul>
  14. 15. Beijing Olympic Action Plan <ul><li>“ Promoting the modernization of Beijing as well as the rest of the country – we aim at maximizing the positive impacts of the Olympic Games on national economic development and accelerating the modernization drive of the country. We will strive for a breakthrough in the capital in terms of economic development, urban construction, social progress and people's living standard, so that, by 2008, the per capita GDP of Beijing will exceed $6,000 and the economic, urban and social development will be drastically accelerated.” </li></ul>
  15. 16. Phase 1: Pre-preparation <ul><li>December 2001 – June 2003 </li></ul><ul><li>Develop Beijing Olympic Action </li></ul><ul><li>Establish structure of BOCOG </li></ul><ul><li>Complete all necessary preparations for construction of the Olympic venues and facilities </li></ul><ul><li>Initiate construction of EP facilities and urban infrastructure, cultural & tourist sites </li></ul>
  16. 17. Phase 2: Development <ul><li>July 2003 – June 2006 </li></ul><ul><li>Complete tasks in 10 th Five-year Plan </li></ul><ul><li>Construction of Olympic venues andother related facilities and preparation in other areas wil be in full swing </li></ul><ul><li>By June 2006, major construction projects of Olympic venues and facilities will be completed and basic preparations finished </li></ul>
  17. 18. Phase 3: Improvement & Operation <ul><li>July 2006 – 2008 Games </li></ul><ul><li>All venues and facilities will be in place </li></ul><ul><li>Venues will be examined and improved </li></ul><ul><li>Test events will be conducted to ensure smooth operation </li></ul><ul><li>All services will be available </li></ul>
  18. 19. Cost of the Games <ul><li>The tally of $42 billion, or about 290 billion yuan, was calculated by the government-run Beijing Olympic Research Center. </li></ul><ul><li>Olympic facilities and operational costs account for 31.8 billion yuan of that total, with another 71.3 billion yuan on efforts to clean up the environment. The majority -- about 180 billion yuan -- has been spent on infrastructure development, including roads and highways </li></ul>
  19. 20. Cost of the Games <ul><li>The tab for China's massive Olympic projects -- ranging from a $3 billion airport terminal to the $500 million &quot;Bird's Nest&quot; National Stadium -- dwarfs the Athens Olympics budget of $15 billion, which helped drive Greece into debt. London, host for 2012, is already embroiled in controversy over its Olympics tab. </li></ul>
  20. 21. Direct & Immediate Effects <ul><li>New facilities are massive & designed to impress with price tag over $3 billion </li></ul><ul><li>Beijing's older architectural treasures have undergone extensive restoration </li></ul><ul><li>Major infrastructure projects – subway lines, roads, rail link to airport and the new world's largest terminal and environmental improvement projects – cost of $42 billion </li></ul>
  21. 22. Longer Term Benefits <ul><li>Developing new and high technology industries including electronics & information, bioengineering & new medicine, optical, mechanical & electrical integration, new materials, and environmental protection and multi-purpose utilization of resources </li></ul><ul><li>Up to 2008, added value of high and new technology industry will account for 40% of city's industrial output value </li></ul>
  22. 23. Longer Term Benefits <ul><li>Developing tertiary industry constitutes mainstay of Beijing economy and will play direct and important role with regard to the services for the Games </li></ul><ul><ul><li>Include information and consultant services, agent services, tourism, convention & exhibition industry, science & technology education, culture & sports </li></ul></ul><ul><ul><li>Also include financing, commodity circulation, real estate services, transportation, post & telecom </li></ul></ul><ul><li>Up to 2008, added value will be 65% of city's GDP </li></ul>
  23. 24. Beijing Economy <ul><li>From 2001 to 2006, economy grew at annual rate of 12.2% 1.4 percentage points higher than economic growth rate between 1997 and 2001 </li></ul><ul><li>Per capita GDP climbed from USD3,000 to USD6,331. The World Bank classifies Beijing's socio-economic development as upper-middle level in the world </li></ul>
  24. 25. Beijing Economy <ul><li>In 2006, average annual wage for Beijing city workers was Y40,117, which was Y20,962 more than in 2001, increasing by 109.4%. If inflation factor is included, annual wage increase is 15.7% in real terms </li></ul><ul><li>Accdg. to standards released by Food & Agriculture Orgn of UN, Beijing residents' living standards have moved from “well-off” standard to the “relatively prosperous” stage. </li></ul>
  25. 26. Post-Olympics <ul><li>Post-Olympic economic downturn, also called “valley effect” or “V-low effect” </li></ul><ul><ul><li>Caused primarily by huge investment during pre-Olympics where consumption and revenues increase up to actual Olympics </li></ul></ul>
  26. 27. Beijing Post-Olympics <ul><li>Economic downturn unlikely since gov't has already taken series of micro-economic measures to cool down economy </li></ul><ul><li>Although investment to build sports venues and other infrastructure totaled billions of dollars, this actually accounts for only 3% of the country's total investment in fixed assets </li></ul><ul><li>Fan Gang – Director of National Economic Research Institute at China Reform Foundation and Monetary Policy Committee member of People's Bank of China </li></ul>
  27. 28. OGI – Olympic Games Impact <ul><li>Collaboration between local organizing committee, a university in the host city & IOC </li></ul><ul><li>Collect information on 150 economic, social and environmental indicators </li></ul><ul><li>Starts when candidacy of city is announced until 2 years after Olympics close (total of 11 years)‏ </li></ul>
  28. 29. Thank you