China’s 2022 Olympics could bolster confidence among investors

With growing domestic pressures and a plunging stock market, China could see confidence renewed — domestically and among international investors — by its successful bid to host the 2022 Winter Olympics, analysts say.

Beijing beat its competitor, Kazakhstan’s largest city, Almaty, in an International Olympic Committee (IOC) vote Friday in Kuala Lumpur, Malaysia, to determine the host of the games. Beijing will be the first city to host the Summer and Winter Olympics.

After a series of recent crises confronting China’s leadership, many consider another pageantry-filled testament to government planning similar to the 2008 Beijing Olympics a way to restore confidence among Chinese citizens and sources of foreign direct investment, a key component of the nation’s income.

Chinese shares plummeted by 8.5 percent last week in the biggest slump since 2007, despite attempts to breathe life into the stock market after a crash earlier in the month that resulted in a loss of over $3 trillion in equity.

Fears of market instability have been exacerbated by political upheaval and national security concerns. Optimists say President Xi Jinping’s anti-corruption campaign, which has unseated people at all echelons of the Communist Party, is essential to rid China of costly and widespread graft.

Naysayers, however, observe that no one in Xi’s perceived inner circle has come under scrutiny and say the campaign is a pretext to upend Xi’s rivals. That’s a popular narrative in the international press as Chinese people and the international business community watch and wait.

And in the past few months, China has faced a series of attacks on public venues, perpetrated by what Beijing has called terrorists from its predominantly Muslim Uighur minority. And there have been immolations by Tibetans — mostly Buddhist monks and nuns — in China’s far west.

According to Arthur Dong, a business professor at Georgetown University currently teaching in Hong Kong, faced with these mounting threats to stability, could use some good news like the Olympic Games, which appeared to build China’s diplomatic and economic momentum with the international community in 2008 and the years that followed.   

Those games, with its shows of opulence and meticulous public planning that successfully — if temporarily — cleared up Beijing’s pollution and traffic congestion, “was one of those moments where [China] had announced to the world that it had finally arrived,” he said.

The result was an emboldened Chinese leadership, Dong said. “The boost in confidence and national pride was reflected by policymakers, enabling them to be more assertive worldwide and taking the opportunity of the moment, seize on the weakness of [Great Recession–era] Western trade partners to fill in the void in Latin America, Africa and emerging-market economies,” he said.

In the afterglow of the 2008 Summer Olympics, still hailed in Chinese media as a triumph of Beijing’s soft power push, the government embarked on a successful bid for political and economic clout in the developing world, aided by the country’s apparent immunity from the worsening global economic crisis.

In the years since the games, several countries — including South Africa, Saudi Arabia, South Korea and Australia — started counting China as their top trading partner. And with China’s rise to the world’s second-largest economy have come apparent political obligations.

In one highly publicized example in September 2014, South Africa, which has seen a surge in investment from Beijing, denied a visa to the Dalai Lama, whom the Chinese government accuses of spurring separatist sentiment in Tibet. 

A successfully planned Olympics in 2022 could prove to the international investors welcomed after the 2008 games that — despite some signs of economic difficulty — the country is still wealthy and runs a tight ship.

Sebastian Spio-Garbrah, a renowned analyst of Chinese business in Africa and developing economies elsewhere, said the grandeur of the 2008 Olympics helped woo partners in the developing world. A 2022 Olympics would serve the same role in boosting Beijing’s international aspirations, he said, citing a more recent example.

“[Vladimir] Putin invaded Crimea on a geopolitical high after Sochi. Who knows if China won’t take some major geopolitical strides after their games?” he said, referring to Russia’s bloody territorial disputes with Ukraine just after the 2014 Winter Olympics in Sochi.

The potential political and economic impact for China depends largely on whether the Olympics draw the kind of international attention that they did in 2008. In 2010, China — in what many called an attempt to build on the momentum started by 2008 — hosted the Shanghai Expo and Asian Games, which failed to muster the same degree of enthusiasm abroad but had nearly 70 million domestic visitors.

China is not a Winter Olympic powerhouse, and few Chinese participate in winter sports, so generating domestic excitement for the 2022 games could prove difficult.

Chinese media continue to laud the soft-power and economic benefits of the 2008 Olympics, which earned Beijing $146 million in profits — counter to the conventional wisdom that hosting games always leads to net losses — said Qingwen Dong, a professor of media studies at the University of the Pacific in Stockton, California.

As for 2022, “I think that the Chinese press did not get [as] excited as it did in getting the right to host the 2008 Olympics. But the Chinese press is conveying the same message about the 2022 Olympics: China can be the best host, and the event will be very successful.” 

After Friday’s decision, many human rights activists condemned the IOC. 

“The IOC decision is truly a disaster for China’s most vulnerable groups as well as the credibility of the Olympic movement,” Sharon Hom, the director of advocacy group Human Rights in China, told Al Jazeera, after issuing a letter this week demanding that the committee postpone the vote to consider recent allegations of Beijing’s human rights violations.

That and other letters from Chinese rights activists to the IOC argued that around the 2008 Olympics, China clamped down on freedom of speech, despite pledges to the IOC that it would allow for protests during the games.

But other rights activists said the games could be a win-win for China’s leadership and its workforce.

Kevin Slaten, a program coordinator at New York–based watchdog group China Labor Watch, explained that the 2008 Olympics were in part responsible for ushering in apparent attempts at improving China’s labor rights.

He attributes international scrutiny and media attention to labor rights abuses in the construction of Beijing Olympic venues such as the 2008’s signature “Bird’s Nest” stadium to the Chinese National People’s Congress’ 2007 passage of an overhaul of labor contract law.

The Olympics will offer international labor rights advocates “a window — maybe larger than usual — into the realities of the working class in China,” Slaten said. Despite the gains that he said were made in response to global criticism of the construction for the 2008 Games, he views the potential benefits of a 2022 Olympics with guarded optimism.

Despite attempts to bolster the amount of China’s economy driven by consumer demand, much of the nation’s prosperity continues to be based on cheap labor.

“The driving force for the economic growth has had a powerful capitalist underpinning that requires the exploitation of a working class,” Slaten said. “I don’t see that halting because of the Olympics.”