Beijing 2008: the most expensive games ever and especially costly ones for the Chinese economy

Despite all the Chinese people’s high expectations of the Beijing 2008 Olympic Games, Chinese authorities fear that foreigners could use the occasion of the games to express their opposition to Chinese human rights affairs, etc. Besides, the Chinese government doesn’t want tourists expected for the period of the games to complain too much about pollution. To clear the air, one million vehicles will be banned from Beijings’s streets for three months. On alternate days, cars with odd and even numbers on the license plates have the permission to drive. With China cutting back its fuel subsidies and thus hiking up fuel prices by almost 20% overnight, Beijing’s motorists will have to save energy and cut back on their mobility. Most coal and steel works in the Beijing area have to cease production for the time around the games, raising fears of  supply shortages and rising prices for steel. Other rules and restrictions are aimed at making the Olympic games safer as transporting chemicals is forbidden for a 3 month period. Chemical industries and logisticians feel the pain. Special transports – e.g. those of goods vital for the Olympic games – are to be approved by authorities to enter the country which takes a lot of time and delays are inevitable. Some companies might be forced to cease their production for several weeks as they lack of material and planning reliability is rare with new rules being introduced ever few days. More severe visa restrictions have prompted several expats to return and many business travelers face difficulites with entry. Consequently, major hotels in Beijing as well as in other cities are half empty, although it was expected that most hotels would be overbooked. Now, the number of foreign visitors is even down compared with last year’s figures. The hysteria of Chinese authorities has made doing business in China a challenge at least for the time until the conclusion of the games. Actually, the Chinese government expects a small profit from hosting the games, but considering the huge financial losses for the companies in a the neighboring provinces of Beijing, the 2008 Olympic Games will be a net loss for both – companies and the nation, but it’s a unique chance for China to present itself on the world stage.

An interesting question will be whether the Chinese administration will untighten its grip on every sector of life and business again after the games.

http://www.time.com/time/world/article/0,8599,1819373,00.html

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