Economy in Numbers

The Beijing Olympics by the Numbers

Global corporations salivate; 1.5 million people are displaced.

By Carrie Battan

When Beijing was selected as the host city of the 2008 Olympic Games seven years ago, a
golden opportunity was granted to the Chinese government. Here was the perfect chance to
place the nation under a global spotlight on its own terms, potentially distracting from the
government's shaky human rights record. Following the pattern of other large-scale athletic
events held across the world, the Olympics have bolstered China's economic growth, and are
expected to create a total of up to two million new jobs before the games are finished.

The games boosted tourism in China well before they began, and a half-million more visitors
are expected to travel to Beijing in August. A single new Marriott Hotel alone has added an
estimated 2,800 rooms to the Beijing hotel market, and the Olympics have likely contributed
to China's 2007 GDP growth of 11.4%the nation's highest in over a decade. With all eyes on
China this summer, the government is not simply focusing on athletics. In addition to
extravagant Olympic facilities, Beijing has built a new subway system and new highways,
expanded its airport, and even improved its sewage system.

But what are the social and economic costs associated with the highly coveted role of Olympic
host city? For China's 1.3 billion inhabitants, displacement of residents in Beijing, a potential
post-Olympic economic lag, and impending labor inequities are among the less-explored
consequences of bringing the Olympic torch to China.

The price tag alone on this summer's games is a hefty $20 billion, with the sparkling new
Beijing National Stadium costing about $420 million and information technology and
communications another $400 million. For many cities worldwide, the cost of such an event
can take its toll for years. Montreal, for example, needed more than 20 years to pay off the
cost of hosting the 1976 summer games. And while China experienced an unusually high
growth in GDP in 2007, it will most likely see an economic lag following the Olympics if
history is any indicator. A recent study conducted by the Bank of China analyzed 12 Olympic
sessions, nine of which experienced a significant dip in GDP growth rate following their
respective games. After the Tokyo Olympics in 1964 and the Seoul Olympics in 1988, the
Japanese and South Korean economies each slowed by more than two percentage points; like
China, both nations had experienced double-digit GDP growth in the years leading up to the
games. Granted, Tokyo and Seoul make up greater portions of the Japanese and South Korean
economies than does Beijing in China, so post-Olympic effects on China's economy are unclear
at this point. Extra spending as a result of the Olympics may also fuel inflation, a growing
problem in China.
*The Chinese government classifies someone as being below the poverty line if they earn less
that the equivalent of $150 per year. The World Bank classifies someone as being under the
poverty line if they earn less than $1 per day, which would make China's poverty rate much
higher than reported by the Chinese government.

Olympic-related growth will also be slowed with the completion of facilities in Beijing. The
estimated 430,000 jobs created by construction for the games will be lost when the projects
are completed, diminishing what had appeared to be a huge bump in employment. Jobs
created by the need for Olympic merchandise may also not have sound labor standards; the
international trade union group FairPlay 2008 reported last year that several Chinese
companies licensed to produce official Olympic merchandise had been using workers as young
as 12 and placing them in dangerous work environments. With laws prohibiting workers from
organizing independent unions and denying workers' right to strike, an Olympic-sized increase
in the low-skill labor pool is certainly a double-edged sword. And praise of new investment in
China does not take into account the mass poverty in other regions of the nation, as economic
benefits will occur mostly in Beijing, China's second-richest city.

*While there were no reported forced evictions in preparation for the 2000 Olympics in
Sydney, housing in the city became much less accessible and affordable for lower-income
residents of the area. House prices more than doubled between 1996 and 2003, while Sydney's
rents increased by 40% between 1993 and 1998. COHRE also reported that Australia made no
commitment to setting aside parts of the Olympic Village or surrounding areas for low-income
residents.

But China's disregard for human rights has not elicited action from the International Olympic
Committee, nor has it stopped some of the biggest corporations in the world from signing on
to sponsor the Beijing Olympics. Even as China continues to threaten journalists who publish
unbecoming stories of the games (in light of the country's pledge to allow freedom of the
press), corporations are salivating to get a foot in the Beijing market by creating ties to the
OlympicsMcDonald's, Samsung, General Electric, and Coca-Cola are just a few of the many
corporate Olympic sponsors in 2008.

Even more significant is the impact the Olympics have placed on impoverished residents of
the city of Beijing and its surrounding areas. The Geneva-based Centre on Housing Rights and
Evictions (COHRE) reported in March of this year that 1.25 million people had already been
displaced in preparation for the games, with another 250,000 expected to be displaced by the
time of the opening ceremonies.

To help prevent such displacements, COHRE has created a list of guidelines for cities hosting
the Olympics and other "mega-events" in order to help protect residents' housing rights. It
suggests that host cities and countries assess the potential impacts the events will have on
residents, and that they work to prevent related evictions and displacements. These may
seem like very simple measures to be taken by any nation hosting an event like the Olympics,
but given China's track record, it will come as no great surprise if, once the excitement of the
games dies down, follow-up evaluations show that the country failed to comply with them.

Carrie Battan is a Dollars & Sense intern and will be a junior at Tufts University in the fall.

Source : This article is from the July/August 2008 issue of Dollars & Sense: The Magazine of
Economic Justice available at
http://www.dollarsandsense.org/archives/2008/0808battan.html