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China?s economic trend in the post-Olympics


Beijing Olympic Games has offered to the world a key to better understand China's rapid development in these years,' said IOC President Jacques Rogge. With the closing of the Beijing Olympics, however, people begin to shift their attention onto China's economic trend after the Games, considering the negative effects induced by the Olympics on some other host countries.

Some people even alleged that in 2009 to 2010, China's economy would be bogged down in great difficulties. But China's President Hu Jintao was cited as saying when interviewed by a coalition of foreign media, 'without any doubt, hosting the Olympics has propelled Beijing's economic and social development, but you cannot overestimate the Olympic effects on China's economic development as a whole, because, after all, Beijing accounts for a small percentage of the country's total economic volume.'

Statistics indicated that, from 2002 through to 2007, Beijing's annual input in the preparations for the Olympics merely takes up 1 percent or less of China's annual fixed assets investment in total volume. Prof. Zhang Xiaode, vice director of China's Association for Public Economic Studies, told the press recently that if China's economy is like the sea, the potential Olympic effects can be taken as frogs; and the frogs won't set up huge waves in the sea. He added that the Olympics can act as a catalyst to China's economy, but China's economy will be mainly influenced by the macro-economic policies and the global economic trend even in the post-Olympic years. The Olympic Games, even though it has the world-wide influence, cannot work as a direct driving force to change the course of China's economic trend.

JP Morgan, a leading financial services firm with global scale and reach, recently released a report saying that the likelihood of China's economic slowdown after the Olympics is minor. From the perspective of the accumulated experiences, the host countries with massive-scale economy and rapid growth rate are comparatively less infected with the Olympic Games, the report said. JP Morgan, meanwhile, published a group of data predicting that China's GDP in 2008 would amount to U.S$ 4.5 trillion.

The year 2008 marks a coincidence in China, as it is not only the Olympic year, but also a year for China to start the periodic restructuring in its economic growth. Currently, China is cooling down its growth in some areas while preserving the general economic trend of having a steady growth. In the framework of macro control policies, china's economy is undergoing a self-restructuring to the due expectations.

Nevertheless, it is also a noticeable fact that the specters of economic fluctuations and even heavy debts could haunt the host countries for years after the Games. Take Sydney and Athens as the recent examples: After the 2000 Sydney Olympics, the GDP growth rate in the State of New South Wales, in which Sydney lies, immediately declined and the investment dramatically shrank, sending the local real estates industry plunging and causing grave consequences on the local economy. The 2004 Athens Olympics left the host city with a heavy debt to be paid off within the following ten years.

The 'Olympic shadow' has shrouded many host countries in history, and must sound an alarm to China, as its economy is an emerging one and the global economy has been sluggish in recent years. The economic globalization makes China more vulnerable facing the post-Olympic economic risks.

Fortunately, the three-decade economic reforms have greatly enhanced China's comprehensive national strength and its economic potential growth rate has been steadily increasing for all these years. Additionally, China's economy boasts a huge total volume, a relatively complete system and much room for manoeuvre. Therefore, China's economic outlook will not dim with the end of the Olympics, even if the country is still facing a severe challenge to curb the existing prices hike while maintaining a rational growth rate in a bid to develop its economy in a 'better and faster way.'

By People's Daily Online