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Post-Games economy 'still sound'
Visitors have photos taken with images of athletes during a media open day at the Olympic Green Common Domain in Beijing.
Photo: Dickson Lee
The economy would not slow down dramatically after the Olympics although post-Games effects should be managed to minimise their impact, leading academics said on Sunday.
The comments were made amid growing concern that investment and consumption demand would ebb after the Games, slowing the rate of economic growth, which has been decelerating this year.
"China will not have a post-Games [major slowdown] because the economic fundamentals will not change after the Olympics," said Wang Yiming, deputy director of the National Development and Reform Commission's macroeconomic institute.
Mainlanders have pinned high hopes on the Olympics to boost the economy. President Hu Jintao cautioned the public one week before the opening ceremony that the role of the Games in economic growth should not be overestimated.
No data on the economic impact of the Olympics has been released so far. But the stock-market slump last week may offer a clue that fear of a post-Games downturn are building.
The economy has been growing at 10.5 per cent annually since 2001, the year Beijing won the right to host the Games.
The capital city invested about 300 billion yuan (HK$341 billion) in sports venues and infrastructure over the period and created about 1.5 million jobs, official figures show.
"After the Olympics ... large-scale investment and consumption of domestic and overseas Olympic tourists will become weak or even disappear in the short term. But the economic basics are unchanged," Mr Wang said. He listed residents' high savings, continuing urbanisation, the public's higher levels of consumption, and improved productivity as stimulating growth.
"The Games contributed a lot to Beijing's economy, but Beijing only has a 3.6 per cent share in the national economy. This small proportion means the Olympics will not influence the national situation."
The negative effects should not be ignored, especially as weaker demand for exports and the continuing shift to a service-based economy slowed growth, he said.
The academic suggested addressing the negative effects by making good use of Olympic venues and infrastructure, continued expansion of Beijing's subway network and increased investment in environmental protection.
Yang Kaizhong, director of the Beijing Economic and Social Development Research Institute, was more optimistic.
"The positive effects of hosting the Olympics will show within three years. Taking advantage of the Olympic legacies in innovation, knowledge, culture and human resources, sectors including tourism, finance and sports will see a booming development," he said.
Both academics predicted that unemployment would not rise after the Olympic Games, given that employees in the service sector could stay in Beijing for better opportunities, and construction workers would migrate to other cities, notably Shanghai, which is the 2010 World Expo host, and to Guangzhou, which is the 2010 Asian Games host.
Regarding the property market, Mr Wang said many people had adopted a wait-and-see approach, resulting in less volume.
In the long run, the mainland would continue to support the sector's development, as it accounted for nearly one fifth of the nation's fixed asset investment, he said.
As for the stock market, which has fallen 60 per cent from the high of last October, Mr Yang said stocks' performance were not directly related to the Olympics.