By Grace Harkins
Despite Beijing’s resolution of maintaining a zero-COVID tolerance plan, around 96 cases in the city have been uncovered since mid-January and at least 200 cases inside the Olympic bubble since its opening.
The reality of a covid bubble is that Beijing Olympics could cost China $38.5 billion, 10 times higher than the initial estimate of $3.9 billion. Dozens of expenses were classified as “capital improvements” rather than official Olympic costs, namely the $9.22 billion cost of the high-speed rail line built in 2015 to connect Beijing to Zhangjiakou, the co-hosting city. The cost of safety measures for the strict covid bubble as well as environmental costs, were not part of initial estimate. Extra government expenses were put into strict testing regiments for athletes and games personnel as they undertake daily mandatory PCR tests. From the last week of January to the first week of February, at least half a million swabs have been taken inside the bubble.
To improve air quality in the city, China shut down various industrial plants to reduce pollution and increase the amount of clear air days. Output of industries like steel, coal mining and aluminium have been curbed to achieve clear skies over the capital during the games. Air quality targets were put in place with targeted levels of PM2.5 particles in the air. This comes after the annual winter campaign was extended to improve air quality to over 60 cities this year from the previous 28 cities by the Ministry of Ecology and Environment.
Chinas implemented strict restrictions to prevent derailing the Olympics, however in doing so China has sacrificed consumption and tourism, both of which are fundamental factors in the model of the game’s economic benefits.
While China projected a ticket revenue of $118 million, this presently does not seem possible. With no tickets available to international travellers or Beijing’s local population, it is unlikely they will see a fraction of this. Instead, the Organisers of the Winter Olympics have announced only ‘selected’ spectators will be permitted at the event. The organising committee of the games also released a statement which justified the measures were to "create a pleasant environment for the holding of the Games."
Chinas economic drag can be highlighted by its first interest rate drop in nearly two years. The ten basis point reduction in the one year loan rates shows the downward trend in a region where increases have been gaining traction. The property downturn, power shortages and lockdowns are clear indications that China is experiencing a slump in growth. Further, GDP rose by only 4 percent in the first quarter which is the slowest the country has seen in 18 months.
Despite the current negative impacts, it is likely temporary and won’t cause significant damage to Chinas growth in the long term. The positive impacts of the Winter Olympic Games may not be seen till later as China involves 300 million Chinese in skiing, hockey and other cold-weather pastimes, transforming winter sports into a 5 trillion yuan ($786 billion) industry by 2025.
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