In the history of Olympics, many host countries once encountered economic bubbles produced by the so-called post-Olympic effect and suffered prolonged economic sluggishness. Such a phenomenon is attributed to their high-level investment prior to the Olympics and a dramatic investment decrease after the Games ended. Will the same thing happen to China after the end of Beijing Olympic Games?
As the host city, Beijing is the largest beneficiary of the Olympics. Given its relatively small scale in the country’s total economic bulk, the short-term “Olympic economy” is unlikely to produce a big influence on the country’s economy. We should not take seriously either the argument that the post-Olympic effect will plunge China into an economic recession or that it will still vigorously push forward its economy. Economic development of a country is always propped by its basic economic situation.
The small influence of the post-Olympic effect on China’s economy does not indicate that the country’s economic development is free from problems. On the contrary, the country still faces a series of problems in its economic development that need our attention. The possible threat from the high-perched inflation economy still exists.
It is predicted that the country’s consumer price index (CPI) is still on the uphill trend. Irregularities and malpractices in the financial market have made its stock market the source of sadness for many individual investors, who no longer regard the market as an effective investment platform.
The increase of liquidity and lightened inflation pressure after the end of the Olympics always create favorable conditions for the stock market of the host country to rise. But as for China, these short-term effects would not change the fact that the reform of the country’s capital market still has a long way to go.
The high-perched property prices are still one of the largest factors hijacking the national economy and the improvement of people’s living conditions. Curbing the skyrocketing prices of commercial houses has been on top of the agenda of the government and a series of measures have also been taken for this purpose.
The rise of the prices of energy and raw materials has caused certain impacts upon the world’s economy. As a big consumer of energy and raw materials, China has been influenced more. The US economic recession and the world's economic slowdown have undermined China’s export market. For China’s economy whose growth is driven to a large extent by export of commodities, that means the country would lose an important external growth motor. How to create a new driving force for the rapid and sustained economic development of the country poses a challenge to the government.
