With the Beijing Olympics drawing to a close, China has had enough reason to celebrate with the number of gold medals it has won. However, did China really win gold? Or did it lose? Rogue economists have already started asking this question. Many economists claim that the Beijing Olympics might have left a gaping hole in the pocket of the exchequer – and the common man- in the host country.
When Beijing was declared as the host for the 2008 Summer Olympics, it was expected that the event would also boost the country’s economy. The largely untapped tourist sector in the country was expected to develop due to the large influx of tourists during the games. Further, businesses in and around the country’s capital were supposed to thrive due to the increased spending by tourists. However, it is now believed that the actual economic impact might turn out to be quite different from the rosy picture that was painted earlier.
The economist claims that the number of foreign visitors for the Beijing Olympic Games was grossly overestimated. In fact, the number of foreigners visiting the country in June-July actually declined by over 25%. Further, many of the temporary Olympic hotels that had come up all over the city had vacant rooms. Even official reports admit that almost 20% of the rooms were not used at all. Many hotels had to drastically reduce their rates to attract customers.
The city’s bars and restaurants also made lesser profits than expected. The stringent disciplinary norms and traffic rules imposed by the city police due to security concerns might have also had a role to play in this. For instance, measures to close down outdoor food markets and restrictions on transportation of goods by lorries had a negative impact on the local businesses.
The manufacturing sector in the country had also taken a severe beating in this period. With strict guidelines to implement pollution control, many companies had had to shut shop in a desperate stopgap arrangement that was aimed at projecting Beijing as a pollution-free city. Further, regulations forbidding commuters from using private vehicles on alternate days also reduced working hours for business houses. Workers at quarries and construction sites were asked to suspend work during the Games.
In the absence of any reliable media report from within the country regarding the impact of the Games (apart from the official government report), outsiders believe that the Chinese Government has demolished around 60,000 houses every year since it won the right to host the Olympics. Displacements and eviction rates among the working class almost doubled during the period. Some economists have also raised the doubt of a post-Olympic investment slump in the country.
In the face of such evidence, it is hard to argue that the Chinese economy could have benefited from the Olympics. Nevertheless, the Chinese Government maintains that the Games have propelled the annual growth rate in the country and transformed it into an “economic hotspot”. Whether the Olympics translate into real gold for China in the long run remains to be seen.