Beijing's Olympic frenzy
Inflated by the Olympic spirit
Mar 1st 2007 | BEIJING
From The Economist print edition
An Olympics-fuelled boom is not all good news—and is especially hard on those looking for somewhere to live in China's capital
THE transformation of China's capital over the past few years has been astonishing enough. This year the effect will be giddying. Due for completion are: a dozen Olympic sports centres; a new cross-city underground railway; a host of office towers; a massive airport terminal; and, after some delay and much criticism, a colossal French-designed egg-shaped theatre in the city centre. Amid an Olympics-fuelled frenzy, Beijing's economy is booming and its house prices soaring. Many fear their return to earth will be bumpy.
Olympic cities usually experience an economic surge before the games. And with under 18 months to go before the games open in Beijing, China's economy as a whole is growing nearly as fast as Beijing's: 10.7% last year compared with the capital's 12% (its eighth consecutive year in double digits). Central-government leaders worry that the pace could be reckless, but are loath to apply the brakes hard.
At its fortnight-long annual session beginning on March 5th, China's largely rubber-stamp parliament, the National People's Congress (NPC), will endorse the leadership's efforts to restrain investment and cool property markets. It will also, according to the Chinese press, approve a target for slower economic growth this year, of around 8%. But few expect much change. Last year's target, too, was 8%. Chinese leaders deliberately err on the low side to deter local governments from spending with even gayer abandon. Similarly, Beijing's target for GDP growth in 2007 is, like last year's, a modest 9%.
For Chinese leaders, however, Beijing's boom is also a worry. Lower-income residents complain with increasing bitterness about house prices. In January the property-price index in Beijing rose by 9.9% compared with the same month in 2006. This was the second-highest rate among 70 cities surveyed. And prices for many residential properties are growing far faster than these figures suggest.
At the NPC session and a five-yearly Communist Party congress due in the autumn, leaders will be trying to stress how much in sympathy they are with the suffering of ordinary citizens. For the past two years, the central government has introduced a series of measures aimed at cooling property markets in Beijing and elsewhere. These have included new taxes on property deals and higher mortgage down payments. Last month new restrictions were imposed on property purchases by foreigners. In Shanghai, these moves have achieved some success (diverting speculative money to the bubbling stock market), but not in Beijing. Last year property development still accounted for more than half of all investment in the capital (see chart).
Speculators are betting that property prices will benefit from the tightness of land supply and the continued slow appreciation of China's currency, the yuan, which should bolster the value of yuan-denominated assets. Moreover, in order to keep the city clear of unsightly cranes and dust-billowing building sites during the games, Beijing has been discouraging new construction projects. This has reduced the expected supply of properties and helped to drive up prices. Last year the total floor space of new housing projects was nearly 6% less than in 2005. For poorer residents the outlook was particularly grim. The floor area of newly launched low-cost housing projects was down by nearly 57%.
According to press reports this week, the central government recently called a special meeting to discuss ways to tame Beijing's property market. Among its suggestions was an increase in the housing supply. In January Beijing's mayor, Wang Qishan, announced plans to boost the construction of affordable housing. It is not clear, however, how soon this will come on the market or whether there will be enough to affect prices. To city governments, high prices mean greater tax revenue, a prize not readily forsaken.
Officials estimate that the Olympics have been contributing more than two percentage points to Beijing's annual growth since 2003. After the games, they insist, the city's new infrastructure and additional glamour (including the egg-shaped theatre, which hopes to attract international stars) will help keep the economy rolling. The flow of investment will be sustained, they say, by further infrastructure development, and by the pent-up demand for property, which will be supported by a continuing large influx of migrants from the countryside.
But some observers are worried. In December's edition of China National Conditions and Strength, a monthly magazine, two Beijing academics, Liu Qiyun and Wang Junping, said the end of the Olympics would coincide with a cyclical downturn in China's economy, exacerbating the risk of a post-Olympics slump in the capital. Beijing's Olympics-related spending of around $35 billion, they calculated, would make up more than 43% of the total for all the games, including Beijing's, since Montreal's in 1976. This could make the post-Olympics investment downturn all the more pronounced—especially if the speculators are busy bailing out.
Notes:
giddy heights
a situation in which you have a lot of success
Although she had been quite a successful model, she had never reached the giddy heights of the Paris fashion world.
Terminal 终点站, 终端
colossal
[kE5lCsl]
adj.
巨大的, 庞大的
bumpy
[5bQmpi]
adj.
(道路等)颠簸的, 崎岖不平的
consecutive
[kEn5sekjutiv]
adj.
连续的, 联贯的
apply the brakes formal
Williams testified that he tried to apply the brakes but couldn't stop the vehicle in time.
Endorse
1
to express formal support or approval for someone or something
endorse a proposal/an idea/a candidate etc
The Prime Minister is unlikely to endorse this view.
err on the side of something
to be more careful or safe than is necessary, in order to make sure that nothing bad happens
It's always best to err on the side of caution .
with gay abandon
in a careless way, without careful thought
divert 1
to change the use of something such as time or money
divert something into/to/(away) from etc something
The company should divert more resources into research.
Officials diverted revenue from arms sales to the rebels.
4
to deliberately take someone's attention from something by making them think about or notice other things
divert (somebody's) attention (away from somebody/something)
The crime crackdown is an attempt to divert attention from social problems.
He'd been trying to divert suspicion away from himself.
Speculative; 投机的
Outlook 2
[usually singular]what is expected to happen in the future
outlook for
The outlook for the weekend is unsettled, with periods of heavy rain.
The outlook for sufferers from this disease is bleak.
economic/financial/political etc outlook
a gloomy economic outlook in Western Europe
grim 1
making you feel worried or unhappy
ￚsynonym harsh
the grim reality of rebuilding the shattered town
When he lost his job, his future looked grim.
Millions of Britons face the grim prospect (=something bad that will probably happen) of dearer home loans.
We received the grim news in silence.
2
looking or sounding very serious
'I'll survive,' he said with a grim smile.
The child hung on to her arm with grim determination . The police officers were silent and grim-faced.
Pent-up幽闭的, 被压抑的
pent-up feelings or energy have not been expressed or used for a long time
years of pent-up anger and frustration
downturn: a period or process in which business activity, production etc is reduced and conditions become worse
ￚopposite upturn
America's current economic downturn
downturn in
a downturn in the auto industry
exacerbate: to make a bad situation worse
The recession has exacerbated this problem. I don't want to exacerbate the situation.
Slump 消沉，衰退
Pronounce 2
[transitive] to officially state that something is true
pronounce somebody/something sth
The victim was pronounced dead on arrival.
I now pronounce you man and wife.
3
[intransitive and transitive] to give a judgment or opinion
The scheme was pronounced a failure.
pronounce on/upon
He used to pronounce on matters he knew nothing about.
posted on 2007-03-05 20:16
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