Growth of Chinas Economy Post Olympics

8/6/2019 Growth of Chinas Economy Post Olympics

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GROWTH OF CHINA·SGROWTH OF CHINA·S

ECONOMY POST OLYMPICSECONOMY POST OLYMPICS



Group MembersGroup Members

y Tarun Jarani -55

y Sagar Vazirani -59

y

Vicky Talreja -61y Sunil Hemwani -08

y Deepak Goyal -07

y

Shivkumar -71



y As the 2008 Beijing Olympics ended in a splendor of fireworks, concerns over a post-Games downturn for theChinese economy re-emerged.

y The capital's gross domestic product (GDP) was expected toregister an average annualized 11.8 percent growth between2005 and 2008, when the city was investing for the Games.

y The expected growth was, on average, 0.8 percentage points

higher than the average rate for the five-year period from2001 to 2005.

y Investment for the Games had driven the city's growth by thebiggest margin in 2007 -- 1.14 percent. Official statistics

showed organizers had spent 13 billion Yuan ($1.90 billion)on construction of venues and another 280 billion Yuan onurban infrastructure, such as to upgrade transport andimprove the environment.



y About 1.5 million new job opportunities were createdbetween 2005 and 2008 along with the investment.

y

Other host cities, including neighboring Tianjin andQingdao, also reported higher growth as they geared upfor the Games. The sailing events in Qingdao helped boostregional economic growth by 0.8 percent annually.

y The annual investment of Beijing for the Olympics took uponly one percent of the country's total between 2002 and2007, according to statistics. About 718,300 square metersof Games-related construction was completed in 2007,0.0139 percent of the total.

y In the first half, the national economy expanded 10.4percent -- 10.6 percent in the first quarter and 10.1percent in the second. The world's fourth largest economywas on a track of slowing since the third quarter of lastyear registered 11.5 percent.



y The country's inflation rate eased to 6.3 percent in

July from 7.1 percent in June, 7.7 percent in May and

a peak of 8.7 percent in February.

y The country's stock market failed to live up to wide

expectations of a bullish run, and reported a more

than 15 percent decline in nearly a month beforeand after the Olympics.



GDP growth in China 1952GDP growth in China 1952--20092009y China's economy has enjoyed annual growth in the double digits

over the last five years, but many observers are now warning of adrastic slowdown to follow the Summer Olympics held in Beijing.

y In the first half of calendar 2008 the Chinese gross domesticproduct reached 13.619 trillion Yuan, or around ¥200 trillion,marking 10.4% annual growth in real terms. This does, in fact,

represent a slowdown of 1.5 points from the 11.9% growth theeconomy marked in 2007.

y In 2009, the GDP or the Gross Domestic Productivitynominal of China was $ 4.99 Trillion and the GDP- PPP(Purchasing Power Parity) was estimated as $ 8.77 Trillion.

y As per the GDP nominal, the china is ranked third largest inthe world and as per the GDP-PPP it is ranked 2rd largest inthe world. The GDP nominal per capita of China in 2009

was $3,677 and that of GDP- PPP was $6,567.





Post OlympicPost Olympic--effecteffecty Many in China are asking whether the country·s economy

would slip into recession after the August Olympic Games,

especially after reviewing post Olympic Host countriesmost of which experienced post-Olympic troubles in theeconomy.

y The premises seemed to be not so good as more and

more companies especially situated in the Guangdong andZhejiang have faced losses and spin-offs due to risingprices of raw materials, export tax rebate cut and theappreciation of the Chinese Yuan.

y Many investors suffered substantial losses. The exportreduced and as a consequence the country·s grossdomestic production (GDP) also slowed down as exportcontributed nearly 35% of China·s GDP. The ConsumerPrice Index (CPI), the main gauge of inflation, rose 7.9%

year on year in the first half of 2008.





y Economic officials and analysts said such a slowdown was widelyexpected based both on economic policies that had been adoptedby China and mounting global economic tensions. It is worth tomention also that the economy went through the severe test of two great natural disasters in the first half of 2008 - the winterblizzard in February and the 8.0 magnitude earthquake in May.

y The slowdown falls within expectations. To prevent the economyfrom becoming overheated was one of the two primary targets setby the Chinese government for 2008. The other was to guard

against fast pace increasing inflation. China had since last yearcarried out a series of tight macro-economic control measures inan effort to cool down the economy and fight inflation.

y According to the Bank of China (BOC) in nine out of 12 Olympicsthe host annual GDP growth in the eight years following the

Games was 0.4 to 2.5 percent lower than during the eight yearsprior to the event. The common thinking is that the OlympicsGames is lending strength to the Chinese economy as China isactually a big market so growth on the domestic market issustainable and as is an important source for global growth.



y The dramatic Beijing·s investment increase at the pre-Olympic stage, worth tens of billions of dollars, accountedonly for a mere three percent of the country·s totalinvestment in fixed assets.

y Even if Beijing·s investment to build sport venues and otherinfrastructure dropped sharply after the games, it wouldnot have a significant impact on the whole economy sincethe city is still at an early stage of domestic development

and its appetite for infrastructure would still be huge afterthe Olympics.

y Besides Beijing China also has plenty of investmentprospects as the country·s appetite for infrastructure

investment and spending on industry upgrading are alsolikely to avoid any post Olympic slump. The hosting of theGames will probably push forward economic developmentin China by helping restructure industries and integratethe Chinese economy into the global market.



PostPost olympicolympic--contdcontd....

y Particularly a growing service industry and amaturing middle class will ensure continuedgrowth. The Games are seen an opportunity toturn national brands in international ones.

y Many Japanese and South Korean companiesbegan to emerge in the world market followingthe Tokyo and Seoul Games. Probably and

hopefully Beijing Games 2008 will have a similareffect on Lenovo, China Mobile, Bank of Chinaand Air China.



THANK YOU!!!!

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Growth of Chinas Economy Post Olympics