Before and After the Beijing Olympics: Economic Change

By T. Farnish and M. Baker

The 2008 Beijing games were welcomed by 94% of the Chinese population. This is no surprise, because the Olympics are a great world tradition, and they provide a great opportunity to show off a country.

Many people believe that there is great economic opportunity in hosting the Olympics, and there is. The problem with hosting is that the country needs to be able to handle such a huge event. This requires an infrastructure that can handle an extraordinarily high volume of people, can handle all the Olympic events, and can house all the Olympians. This of course costs a very large amount of money. In China’s case the total cost of hosting the Olympics in 2008 was over 40 billion U.S dollars. Part of the process for raising this money were tax increases. Nothing drastic, but every increase was noticed for those citizens that struggled with money. The issue is that the host country needs to make it all back for the Olympics to positively affect the economy.

Also, after the Olympics have ended the facilities need to be put to use or they become bad investments. Some were bad investments from the start, like building a new airport terminal to handle all of the traffic. Beijing will not experience that very high volume of people regularly, but it was necessary for the few weeks that the games were taking place. According to Michael Wines in a New York Times article, these issues have greatly affected previous countries, like Greece, “where 21 of the 22 stadiums erected for the 2004 Olympics were reported last year to be unoccupied.” Also in Greece, “The $14.4 billion cost of that party is being cited by some as a source of Greece’s potentially destabilizing fiscal troubles.” After the 1976 games Montreal also experienced economic difficulty due to the Olympics.

The difference with China, however, is that most of its real estate is already vacant. The increase in jobs from building these structures is moreimportant for China than keeping them occupied. Due to China’s extreme growth, the building will eventually be filled. Even if they stand empty for awhile, the building process creates jobs, and raises GDP, which theoretically raises living quality.  The lasting effect that the 2008 games had on China is yet to be seen, but so far the empty structures have not slowed the economic juggernaut down. The Olympics brought new development to China, which cannot be ignored.

 

 

See also:

Before and After the Beijing Olympics: Political Change

Before and After the Beijing Olympics: Physical Change

 

Sources

Yong Zhou and John Ap, “Residents’ Perceptions Towards the Impact of the 2008 Olympic Games,” Journal of Travel Research 48, no. 1 (2009): 78-91.