Post-Olympic Economy: Is Beijing Ready?

With the approach of the 2008 Olympic Games, Beijing's "Olympic economy" is in full swing. All kinds of stadiums, transportation facilities and large-scale greening transformation have entered the sprint stage, and major businesses are also gearing up to make various upfront investments for hundreds of billions of "Olympic cakes".

This large-scale investment has made Beijing's economic indicators all red. Since 2003, the Olympic economy has contributed more than 2 percentage points to Beijing's economic growth every year. In 2006, Beijing's economic growth rate reached 12%, maintaining double-digit growth for the eighth consecutive year, and house prices were also rising. According to the general law of Olympic economy, there will be a greater investment climax in the two years before the Olympic Games, so Beijing's economy is likely to reach a higher level in 2007.

But this joy has also caused people to worry about the risks facing Beijing. After all, 15 days later, the host city of the Olympic Games actually assumed the debt for 30 years, which really happened. Throughout the history of modern Olympic Games, almost no host city has completely got rid of the so-called "post-Olympic economic risks".

The ghost of the Montreal trap

Montreal Sports Center in Canada is the eternal pride of local residents, and it has become one of the most symbolic and commemorative landmark buildings in the history of the Olympic Games. But at the same time, this building also carries the bitter memories that Montreal residents can't get rid of.

1976 Olympic Games, the actual investment was completely out of control, and it cost 2.4 billion US dollars, nearly 20 times more than the budget. The construction investment of the sports center exceeded the budget by 6 times, and the construction period was delayed again and again, so that the original design was to control the ceiling with buttons and turn it into an indoor playground, which was not completed until 1985.

This Olympic Games is called "a long-term nightmare for Montreal taxpayers", with losses exceeding $654.38 billion. After the Olympic Games, Montreal citizens took on a new tax-Olympic special tax, and it will take 30 years to pay it. Until June 2006, the debts owed by 1 1 and 1976 were paid off. At this time, the sports center is facing a new problem: the roof of the stadium needs to be replaced, and the Montreal municipal authorities need to pay a large sum of money.

It has also left a long-term psychological shadow on Montreal citizens, making them unwilling to provide funds for large-scale sports events costing tens of millions, which is extremely obvious in the right to host the 2005 World Swimming Championships. On June 5438+ 10, 2005, FINA deprived Montreal of the right to host the World Championships, because there was still a financial gap of14.6 million dollars within the prescribed preparation time, and the Canadian federal government made it clear that it was impossible to provide funds to support Montreal. Deroche, the 59-year-old head of the Montreal Organizing Committee, was criticized for this. On February 2 of the same year, under pressure, he shot himself in his gray Mercedes.

After active efforts and mediation, Montreal finally regained the right to host the event on February 10. In July, athletes from all over the world reappeared at the Montreal Sports Center after 30 years. I believe that at that moment, many people will think of a technical term in the history of the Olympic Games-the Montreal trap.

The experience of Montreal shocked the whole world, so that hosting the Olympic Games became an arduous task, and few people cared. This situation continued until 1984 Los Angeles Olympic Games. Peter Ueberroth, the chairman of the organizing committee, is regarded as "another person who set an Olympic record". Without government subsidies, increasing taxpayers' burden and issuing lottery tickets, Ueberroth successfully hosted the Olympic Games with 500 million US dollars and made an unprecedented profit of 250 million US dollars through a series of pioneering commercial means, such as selling TV broadcasting rights, looking for corporate sponsors, leasing commercial rights, pre-selling tickets and reducing expenses.

Since then, the Olympic economy has emerged, the right to host the Olympic Games has become a sought-after object, and the Olympic Games has since become an attractive big cake.

Just as people gradually forgot the "Montreal trap", 1998 Nagano Winter Olympics revived people's memory of it. After the Winter Olympics, Nagano experienced an economic slowdown called "post-Olympic syndrome". During the period of 1999, Nagano's manufacturing industry fell by 30%, setting a record of 2 1 1 enterprise bankruptcy, and its recession even exceeded the national average during the Great Recession in Japan after World War II.

Equally unforgettable is the 2004 Athens Olympic Games. In the past 50 years, Greece may have hosted the Olympic Games the least, but it happened that it hosted the first Olympic Games after "9. 1 1". Athens Olympic Games is the most expensive Olympic Games with the highest safety requirements in history. It should be said that Athens successfully completed the task and won the glory.

But on the other side of the coin, the security expenditure of Athens Olympic Games is nearly six times that of Sydney Olympic Games in 2000 and 50 times that of Atlanta Olympic Games 1996. Although the Greek government increased the Olympic budget from 2.3 billion euros to 5.7 billion euros, it still could not make up for the increasingly out-of-control expenditure. According to Ms. petra Ria, Greek Acting Minister of Culture in charge of Olympic affairs, the total expenditure of the Athens Olympic Games may be $654.38+06 billion, which is almost three times the increase in the budget.

The huge expenditure directly led to the Greek government's budget deficit of 6. 1% in 2004, which was more than twice the highest standard set by the European Union. The Greek government recently admitted that it is impossible to recover the cost of hosting the Olympic Games "in a short time". Despite repeated pressure from the European Union, the Greek government has not announced the specific amount of subsidies for the Athens Olympic Games. However, according to the most conservative estimate, every resident of Athens should bear the debt of 10 at least for this 15 day carnival.

Inevitable "Olympic Valley Effect"

Since 1984 was introduced into the commercial operation of the Los Angeles Olympic Games, it is really rare for the Olympic host city to be as miserable as Montreal. However, in the history of the Olympic Games, a technical term-Olympic trough effect was born, which is similar to the situation but slightly inferior to the "trap". Few host cities can avoid this influence, even Sydney, a city that hosted the Olympic Games which was praised by former IOC President Samaranch as "the most successful Olympic Games in history".

The so-called "Olympic trough effect" refers to the economic depression of the host city due to insufficient demand after the Olympic Games. Olympic economy has obvious characteristics of stages, which are divided into pre-Olympic stage, Olympic stage and post-Olympic stage by academic circles.

In the pre-Olympic stage, due to the substantial increase in infrastructure investment such as Olympic venues, the economic development was quite strong, especially in the first two years of the Olympic Games. During the Olympic Games, the influx of population led to strong consumer demand, so the economy was full of vitality. However, in the post-Olympic stage (usually about three years after the end of the Olympic Games), the economy tends to decline and enter a trough.

The "most successful" Sydney Olympic Organizing Committee edited the preparatory experience into words after the Olympic Games and sold it to the International Olympic Committee for $3.5 million, which set a precedent for selling the experience of the Olympic host city as intellectual property in the history of the Olympic Games, but it also failed to avoid the "Olympic trough effect". Some people joked that if the Sydney Olympic Organizing Committee sold its experience two years later and added an analysis and summary of why Sydney fell into the "Olympic trough effect" to the materials, the price could at least quadruple and the loss of the Athens Olympic Games would be much smaller.

After the 2000 Olympic Games, the GDP growth rate of New South Wales, where Sydney is located, declined slightly until 2003. Investment has fallen sharply, and the decline of the real estate industry is also obvious. From 1993 to 1999, house prices in Sydney continued to rise, with an average annual increase of more than 10%. The house prices around the main stadium even doubled in three years, with an average annual increase of nearly 40%. After the Olympic Games, the real estate market fell sharply for more than two years, which seriously affected the sustainable development of the economy.

Equally embarrassing is the use of sports venues. The 65,438+065,438+00,000-seat Olympic main stadium held only eight games in 2002, but it was slightly better in 2003. From 65438+ 10 to 65438+ 10, * * held 24 games with a total audience of nearly 870,000. Apart from the Adidas International Championship in June 5438+ 10 every year, there are few other important competitions in the Tennis Center. Finally, it has to compete with the Dome Gymnasium and Entertainment Center for rare dances, concerts and other activities. The water sports center makes a living by holding carnivals and corporate activities, with an average annual loss of 3 million Australian dollars. The average occupancy rate of hotels near the stadium is only 30%.

Barcelona (1992) and Atlanta (1996), which are relatively successful in business, also have the "Olympic trough effect", although their economic recession can not be completely attributed to the Olympic factors (especially Barcelona, when Spain and the whole of Europe experienced economic recession).

Even the 1988 Seoul Olympic Games, which is recognized as the Olympic Games that promoted South Korea's "economic take-off" and did not show obvious "Olympic trough effect" in the first two years after the games, its economic growth rate showed a relatively obvious decline after 1990. At the same time, the development boom of Seoul New District before the Olympic Games caused a real estate bubble, and it was not until 1992 that the real estate price showed a downward trend. After 1995, the decline was even more obvious. Many projects were forced to stop work because of insufficient funds, or were entrusted to third parties at prices lower than the cost. 1997 the Asian financial crisis has shrunk it by 30% to 70%.

It should be pointed out that these Olympic host cities have consciously avoided the "Olympic trough effect" in the planning stage, but they have not yet achieved a perfect ending. Obviously, this influence is hard to avoid.

In the face of potential risks, can Beijing create miracles?

The "Olympic trough effect" stems from the sharp contraction of long-term demand driven by the expansion of Olympic investment demand. According to the forecast of Beijing Municipal Development and Reform Commission, during the seven years from 2004 to 20 10, the total investment in Beijing will exceed150 billion yuan, most of which will be completed several years before the Olympic Games. China's economic growth mainly depends on investment, and Beijing is no exception. The fluctuation of investment demand will inevitably affect the steady growth of Beijing economy.

The total investment of Beijing Olympic Games is expected to exceed $35 billion, accounting for more than 43% of the total investment of previous Olympic Games (including Beijing Olympic Games) since Montreal Olympic Games 1976. The direct investment in new construction required for the Olympic Games exceeded US$ 654.38+07 billion, accounting for more than 48% of the same period last year and 2.654.38+0 times that of the Athens Olympic Games. Moreover, there have been serious overspending in recent Olympic Games, and Beijing is not optimistic. One of the reasons for the "post-Olympic economic risk" is that the direct investment of the Olympic Games and the new investment required by the Olympic Games account for a high proportion of the total investment.

According to the data of previous Olympic Games, the closer the ratio of direct investment to indirect investment is to 1, the greater the possibility of economic risks in the host city. The ratio of Montreal Olympic Games is 0.923, and the deficit is as high as $6,543.8 +0.5 billion. The ratio of the Moscow Olympic Games was 0.8, and the deficit reached $6.965438 +0 billion. At the Athens Olympic Games, the ratio was 0.9 16, when Greece's fiscal deficit rose by 0.7%. The proportion of direct and indirect investment in Beijing Olympic Games is as high as 0.94, which is 0.2 percentage points higher than that in Montreal Olympic Games, which has the most serious economic risk in Olympic history. Compared with history, it really makes people sweat for Beijing.

At present, Beijing's pillar industries mainly include construction, communication and electronic equipment manufacturing, information service and software industry, finance and insurance, chemical industry and real estate industry, and the GDP of these six industries accounts for more than 44.3% of Beijing's total economic output. At the same time, these industries have high industrial correlation intensity, and the influence coefficient of the four industries is greater than 1, which exceeds the average influence among industries in the national economy. According to the industry statistics after the Sydney Olympic Games, the growth rate of the construction industry decreased from 1.8% before the Olympic Games to -0. 18% after the Olympic Games, with a decrease of 1.98 percentage points. The real estate industry has changed from 0.34% before the Olympic Games to 0.02% after the Olympic Games. The financial industry increased by 0.27% before the Olympic Games and decreased by 0.03% after the Olympic Games. If the same thing happens after the Beijing Olympic Games, it will definitely cause drastic fluctuations in Beijing's economy.

A bullish stock market is also a potential danger. Although the host country of the Olympic Games makes little money by hosting the Olympic Games, its real estate investment market is always on the rise before and after the Olympic Games. In the past 1 1 Olympic Games, the stock index of the host country rose by an average of 25% in the 12 months before the Olympic Games. In the last six Olympic Games, the stock markets of all the host countries made some gains in the year before the Olympic Games, including South Korea (1988), Greece (2004) and the United States (2004). At present, China stock market is becoming more and more frothy. Once speculators are busy withdrawing funds, the investment after the Beijing Olympic Games will fall faster than expected.

Historical experience shows that the host country of the Olympic Games experienced economic overheating within two years before the competition. In the first four months of 2007, the real growth rate of China's total retail sales of social goods was 15%, while the investment of the whole society increased by 25.5% in the same period, and the ratio of investment to consumption reached over 70%. Such a high proportion of investment and consumption is unsustainable, and it is likely to decline or go through a long and painful adjustment period.

Excessive liquidity in the macro economy may lead to inflation. In the first four months of this year, consumer prices of urban and rural residents in China rose by 2.8%, and prices continued to rise in March and April. The rising prices of pork and other necessities have put everyone under pressure. At the same time, real estate investment accounted for 27.4% of the total fixed assets investment in the first four months, indicating that a large number of surplus funds flowed to the real estate industry. When real estate finance is dominant, once the economy shrinks, there will be an avalanche of funds.

Moreover, according to the trend of GDP growth in China, the average cycle of China's economy is eight years. Judging from the mid-cycle fluctuation, 2004 is the peak of this economic cycle. According to the eight-year wavelength, China will enter the stage of periodic recession in 2008. This has a "magnifying effect" on the post-Olympic economic risks, which is likely to aggravate the decline of the national economy after the Beijing Olympics.

Comparing Beijing with historical experience may be inaccurate. China is a big country, and its economic scale far exceeds that of Greece. As the capital, Beijing will also receive the full support of the whole country. It is impossible for the Canadian federal government to refuse to bear the financial gap of14.6 million dollars for Montreal.

The central government and the Beijing Municipal Government actively responded to the "post-Olympic economic risks". Under the call of "Thrift Olympics", Beijing has laid out some Olympic venues in colleges and universities and "slimmed down" the construction of the main stadium of the Bird's Nest. The central government has also begun to regulate the overheated economy. In this year's "Government Work Report", the economic growth target for 2007 is set at around 8%, while the economic growth rate for 2006 is 10.7%. Although major research institutions have pointed out that there is room for this economic growth target, this intentional downward adjustment has sent a signal to local governments to strictly control the excessive economic growth. Beijing has set the expected target of GDP growth in 2007 at 9%.

More importantly, China is the first developing country in the world to host the Olympic Games. In the middle of industrialization, the economic development momentum is strong. Like South Korea, it is likely to take advantage of the Olympic East Wind to enter the fast lane of long-term high economic growth.

But this does not mean that historical experience is not important. Throughout the history of the Olympic Games, we will find that apart from technical factors, the higher the degree of marketization of the Olympic Games, the more effectively we can avoid "post-Olympic economic risks". This is because countries that host the Olympic Games mainly by the government are often overjoyed and take some administrative and non-market measures in their operation, which leads to "burning money" before the game and "trough" after the game.

The British "Economist" magazine criticized the Greek government for often emphasizing "don't care too much about the fiscal deficit": "Isn't it better to invest in schools, hospitals, highways or other infrastructure that can produce more commercial benefits and directly promote economic growth than to lose face? If Greece needs better infrastructure, direct investment will do. Why should it be related to the Olympic Games? "

"When preparing for the Olympic Games, don't think about' shocking the world'. If you want to host an Olympic Games with a happy process and a sensation in the world, you will certainly reap the pain after the end. However, it may be painful to focus on hosting an Olympic Games to promote urban development and meet the needs of citizens, but the result will definitely' shock the world'! " This is the advice given to Beijing by the former Secretary-General of the Barcelona Olympic Organizing Committee.