Will Beijing be getting the blues?

Sep 19 2008 by Nicholas Craig, The Journal

I’M off to Beijing for a business trip this week. It will be fascinating to see the after effects of the Olympics on this frenetic city’s business community.

Clearing up after the Paralympics closing party will give the authorities a chance to assess the Games’ impact.

History shows that some hosts, such as Sydney, Tokyo and Seoul, have had severe post-Olympic blues because investment dropped.

China’s growthbefore the Games was extraordinary by any standards. About 1.5 million job opportunities were created between 2005 and 2008, and £20bn invested to make these Olympics the best ever organised.

Now the world’s fourth-largest economy is showing signs of slowing, but is still maintaining a healthy, robust outlook. This is despite the global slowdown and slacker export demands. Beijing’s bullish approach never ceases to astonish me.

The overriding aim of the Olympics to China was to position it as a strong world power. My Beijing contacts report that it has worked internally. Beijing residents are benefiting from a feelgood factor, supporting the government and the direction of its policies.

But the focus and galvanising force of the Olympics, which has dominated Beijing life for seven years, has been snuffed out and a colder, challenging world is coming into focus.

China’s customers are cutting back and raw materials costs are rising. Migrant labour, on which China has depended for its extraordinary growth, costs more as workers find more lucrative posts closer to home.

The hundreds of superb new hotels will have to find guests year-long and the spectacular stadiums need to fill their costly venues. The Birds Nest will be home to Beijing’s football team and an arena for concerts and conferences with retail malls, at a reconstruction cost of £22m.

In contrast, London 2012 has seen the Olympics more as a marathon than a sprint from inception. Its legacy is integral to its design. Boris Johnson is asking business people and investors worldwide for ideas on how to keep the wow factor of the Olympic Park alive long term.

The most important aspect of London 2012’s legacy is to create facilities that nurture enthusiasts of all ages for a generation to come.

Access for everyone to top-class local venues is paramount – not just in London, but countrywide.

Nicholas Craig is a partner at Watson Burton LLP