How will the Beijing Olympic Games impact on the capital's
economy? Pan Fan, who is in charge of economic surveys in Beijing
under the National Bureau of Statistics, has provided some clues in
a recently published report, Olympic Investment and Beijing
Economic Development.
China Daily reporter Li Jing spoke to Pan to get more
details.
What is Olympic investment?
According to the Beijing Olympic Action Plan, Olympic-related
investment includes three parts. They are investment exclusively
for Olympic competition venues and related facilities, and
investment in the city's infrastructural construction that is not
part of the city's 10th Five-Year Plan (2001-05). The third part of
the investment is for such projects as environmental protection and
transportation, which has already been included in the 10th
Five-Year Plan and is referred to as indirect investment.
In our published report, we only took into consideration the
first two investments, because they are new investments as a result
of the Games.
How will the money be spent?
Nearly 80 percent of the new investment will be focused on
postal and telecommunications, infrastructural facilities, and
improvement of the living environment. The investment used in
infrastructure is estimated to generate 10 percentage points higher
economic growth than the average level.
Is there any other new investment?
Yes. Apart from the direct investment mentioned above, tourism
revenues generated by the Olympic Games and the funds that the
International Olympic Committee (IOC) will allocate to the Beijing
Organizing Committee for the Games of the XXIX Olympiad (BOCOG) are
two other major parts of the new input.
Any estimates on such additional
investment?
We estimated that 2 million more tourists will visit Beijing
during 2008, 300,000 of whom are from overseas. These additional
tourists will help promote the development of transportation,
hotels, catering, entertainment and other service sectors. It is
predicted that every domestic tourist will spend 1,200 yuan
(US$150) and every overseas visitor will spend US$1,050 during
their stays in Beijing. So, the total additional revenue is
estimated at nearly 7.7 billion yuan (US$963 million). All the new
investments have been included in the input-output analytical model
in our study.
How will the new investment impact on Beijing's gross
domestic product (GDP)?
According to the input-output model, the new input will help the
city's GDP grow an annual average of 0.8 percentage points higher
than usual from 2004 to 2008. To be specific, the new investment
will add 1.03 percentage points in 2006, 1.14 percentage points in
2007 and 0.85 percentage points in 2008. We estimated that between
2005 and 2007, when the Olympic investment reaches its peak, the
average annual growth rate of Beijing's GDP will be 12.3 percent,
at current prices.
What are the sectors that will benefit from the Olympic
Games?
More than 50 sectors will be connected with the Olympic Games
directly or indirectly, and the new investment will boost their
development to varying degrees.
For example, the "Olympic factor" will add 5.45 billion yuan
(US$680 million) to the city's finance and insurance sector in five
years from 2004, and 17.28 billion yuan (US$2.16 billion) to the
construction industry.
The two sectors, along with retail and wholesale, real estate,
computer and software, communications and computer equipment
manufacturing, leasing and services, and scientific research and
technologies, will further strengthen their positions as Beijing's
pillar industries in the years ahead. The total value added of the
above eight sectors in total will account for more than half of the
city's GDP.
The tertiary industry, or the service sector, will grow faster
than the secondary industry and agriculture. It may even outpace
the total GDP growth rate. By 2008, the service industry is
expected to take up about 70 per cent of the city's economic
capacity in 2008.
In general, the "Olympic factor" will bring in an additional
105.5 billion yuan (US$13.2 billion) to the city's total economic
output between 2004 and 2008.
How about the new job opportunities?
We estimated that about 1.82 million new jobs will be created
during the process of preparing for and hosting the Olympic Games.
Sectors like the construction, high-tech, manufacturing, logistics
and social service industries will be the major job providers. The
construction industry alone will provide 430,000 new jobs between
2004 and 2008, followed by the retail and wholesale industries,
which will generate 130,000 new jobs.
The year 2007 will see the peak of the Olympic employment, with
more than 510,000 new jobs created. There will be about 430,000 new
jobs in 2006, 406,000 in 2005, 372,000 in 2008 and 95,000 in
2004.
(China Daily August 4, 2006)