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UPDATED: August 10, 2015 NO. 33 AUGUST 13, 2015
The Great White Hope
Beijing's successful bid for the 2022 Winter Olympics can fuel an economic boom
By Wang Hairong

Residents of Chongli County of Zhangjiakou celebrate the successful Olympic bid by Beijing and Zhangjiakou on July 31 (XINHUA)

Chongli, a small county in north China that has remained in obscurity for ages, became destined for international fame from the moment Thomas Bach, President of the International Olympic Committee (IOC), announced on July 31 that Beijing had won the bid for the 2022 Winter Olympics.

The Chinese capital Beijing will co-host the event with Zhangjiakou, a city about 200 km to its northwest. According to the bid, most snow events will be held in Chongli in Zhangjiakou. So the county with a population of around 120,000 is now gearing up for the grand event in seven years' time.

"Chongli has already changed a lot. With many stylish hotels and shops, some parts of it look like Hong Kong," said Wang Xiaoxuan, a young mother from Chongli who lives in Beijing.

Wang has just returned to Beijing from a trip to her hometown. She likes to go back there in summer with her son because of its cool climate.

Tucked in among mountains towering around 1,500 meters to 2,000 meters above sea level, Chongli has weather distinct from that of Beijing. "In winter, the lowest temperature is often below minus 20 degrees Celsius, and in summer, the daily highest temperature is around 20 degrees," Wang said.

Chongli has long been economically underdeveloped. Low summer temperatures and the hilly terrain make it unsuitable for many crops, and low income from agriculture has driven many young people to seek jobs in nearby Beijing and Tianjin.

But in recent years, the development of the local snow industry and the prospect of hosting the Winter Olympics have been luring some natives back.

Chongli has a cluster of ski resorts, drawing skiers from home and abroad. Wang is confident the successful Olympic bid will boost the local economy.

Now Beijingers are not only traveling to Chongli frequently, some have also bought properties there. "After Beijing was confirmed as the winner, Chongli's housing prices shot up 1,000 yuan ($161) per square meter overnight," Wang told Beijing Review.

Cost and benefit

But while Chongli residents have welcomed the Winter Olympics as a wealth-generating blockbuster event, the profitability of the Games has been cast into doubt in other international locations.

The 2014 Winter Olympics in Sochi saddled its host with a mind-boggling bill of $51 billion. Some of the original six bidding cities for the 2022 Winter Olympics pulled out of the race due to financial concerns even before the IOC announced the finalist.

Nonetheless, the Beijing 2022 Olympic Winter Games Bid Committee is confident about the Games' economic benefits.

According to Beijing's bid, China will invest $3.9 billion in the Games, only a fraction of the Sochi Winter Olympics' cost.

This is because Beijing already possesses several venues to host the events. Of the 12 competition and training venues required for the 2022 Winter Olympics, 11 are already there, inherited from the Beijing 2008 Olympic Games, said Zhu Chengyi, former Vice Director of the Winter Sports Management Center at China's State General Administration of Sports.

"We only need to build a competition venue for speed skating," Zhu told Beijing Review.

Beijing's frugality is in line with the concept of sustainability and cost-efficiency enshrined in the IOC's Olympic Agenda 2020.

The Chinese bidding committee sees tremendous commercial potential in the Games. On March 27, the panel told the IOC during the latter's evaluation visit that preparations for the 2022 Games are expected to boost the economic development of the Beijing-Zhangjiakou area. Industries such as sports, culture, tourism and leisure, and conferences and exhibitions are projected to contribute about 20 percent of the local GDP by 2022.

The committee has conservatively set the overall marketing revenue target at $858 million. It includes revenues from licensing and ticketing and sponsorship worth $660 million.

As of March, eight major sponsors have signed up to support the 2022 Winter Games. They include Tencent, China's largest Internet service portal, Snow Beer, a joint venture from China reported to have become the largest-selling beer in the world, PricewaterhouseCoopers, Bank of Beijing, and the Beijing Automotive Group. A number of other businesses have also indicated their willingness to sponsor the Games, the bidding committee said.

The biggest impact of the Games will be industrial structure adjustment, said Yi Jiandong, deputy head of the bidding committee's overall planning and legal affairs department.

Heavy industry used to constitute Zhangjiakou's economic backbone. Now the Winter Olympics will spur the growth of culture, sports and tourism sectors, making them pillar industries. Yi said the 2022 Winter Olympics is predicted to generate 200,000 job opportunities for Zhangjiakou.

Chongli received nearly 1.57 million visitors last year. Currently, one sixth of the local residents are working in skiing-related industries, including tourism and rental as well as production and maintenance of ski equipment.

Zhang Junwei, a researcher with the State Council Development Research Center, said Beijing's successful bid will boost investment in public companies in five industries: infrastructure, consumer service, environmental protection, sports and franchise industries.

He said the Beijing Municipal Government has already set a goal to halve the level of PM2.5—particulate matter less than 2.5 microns in diameter found suspended in air and causing a major health hazard—within Beijing's environs by 2022, a development that promises ample opportunities for the green industry.

The Games will also boost infrastructure construction. At present, it takes three hours to travel from Beijing to Zhangjiakou by train. A high-speed railway, which is being built, will shorten travel time to no more than one hour. "Construction of the high-speed rail started at the end of 2014, and is scheduled to be completed in 2019," Beijing's Vice Mayor Zhang Jiandong said.

Increased connectivity between Beijing and Zhangjiakou, which lies in Hebei Province, will also prompt the coordinated development of the Beijing-Tianjin-Hebei area.

Cold industry

The 2022 Winter Olympics will not only spur economic growth, but also attract more people to winter sports.

Beijing's bid will motivate 300 million people to strap on their skis or skates, said Liu Peng, President of China's Olympic Committee, while making a presentation in Lausanne, Switzerland, on July 9.

Yu Donglin, General Manager of the Wanlong Ski Resort in Chongli, said Beijing's bid has sparked a surge in the number of skiers coming to the resort. "In the 2014-15 snow season, the number of visitors grew by nearly 80 percent, while in 2013-14, the year-on-year growth rate was about 30 percent," he said.

Traditionally, winter sports have mainly been popular in China's northeast, which is cold and relatively humid. Now, they have won fans from other parts of the country.

Li Kaida, head of the Wanlong Ski School, said more and more children from south China, who had never seen snow before, are now learning to ski. "This illustrates the increasing popularity of ice and snow sports in China," Li said.

Now Chinese children are getting into winter sports at a very young age. "Many are starting to learn skating when they are 3 or 4 years old. They get on ice after wrapping up a day in kindergarten," said Lu Ye, an IT professional in Beijing, watching his son, 6-year-old Dingding, racing on the iCool ice rink in Beijing Dreamport Mall in Haidian District.

Dingding is learning to play ice hockey under a professional coach. The boy began to play at the age of 5. Lu said it started with the kid finding players in ice-hockey outfits "very cool." Now, the youngster is training for a national competition in October.

Assuming that Beijing's Winter Olympic bid will motivate 300 million people to take up winter sports, industry experts estimate the ice and snow industry will generate nearly 3 trillion yuan ($484 billion) annually.

Some big companies have already set their sights on the winter sports industry. In February, the Wanda Group, China's largest real estate developer and the world's biggest cinema chain operator, purchased 70 percent equity in the Switzerland-headquartered Infront Sports & Media or Infront Sports & Media (China), a leading sports marketing company. Wanda's founder Wang Jianlin said he is interested in Infront's rich experience in winter sports marketing, reported Beijing-based China Economic Times.

Toread, a company specializing in outdoor sportswear and equipment, announced winter sports items will be one of its major product lines this year.

But while companies vie for a bigger market share in the snow and ice industry, they should also develop local snow and ice resources appropriately and protect the environment. This is what Su Yong, Dean of the Institute of Oriental Management at Fudan University, told Shanghai Morning Post.

Safeguarding the environment has now become a major concern. On August 1, at a forum on Chongli's development, Bai Yinhai, head of the county, said the successful Olympics bid will see investors and companies flocking to his county. Chongli, he warned, would face many temptations. However, it should keep its development under control, steady and environment-friendly.

Copyedited by Kylee McIntyre

Comments to wanghairong@bjreview.com

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