China's looming Olympics disaster

Posted at March 19, 2008

The Beijing games are supposed to showcase China’s stature on the world stage. But they’re producing protests at home and may shut down big hunks of the nation’s economy.

I was in Beijing this weekend March 14-17 2008 and all the whisper was about how the government is spending so much money on the Olympic stadium when they could spend the money on the people. They hire all the foreigners for all the projects and design when they could design it themselves but they want it to showcase the best works in the world. I saw this article written By Jim Jubak

On March 10, Haile Gebrselassie, the world record holder in the marathon, pulled out of August’s Beijing Olympics. The city’s notoriously bad air pollution posed a threat to his health over the 26.2-mile course, the Ethiopian runner said.

It says a lot about the disaster that’s unfolding for the Beijing games that the withdrawal of an Olympic favorite caused hardly a ripple. And why should it when bigger stories are brewing? It’s possible that:

A forced shutdown of Beijing’s factories and power plants during the games will throw China into an economic downturn.

Diversion of safe food to the Olympic Village will cause food riots elsewhere in China.

The transfer of 80 billion gallons of water — equal to the annual water consumption of Tucson, Ariz., a city of 535,000 — from Shaanxi and other provinces in northwestern China will shut down factories and agriculture in the region.

Yes, the Beijing Olympics, which were supposed to showcase China to the world, are still likely to provide exactly the kind of prestige-building extravaganza that the country’s leaders had hoped for. But domestically, the games are quickly turning into an economic and political disaster. Once upon a time — maybe six months ago — investors (including yours truly) looked on the Olympics as a guarantee that China’s stock market and economy would keep chugging along through the summer. “Safe until August” was the mantra.

Now, it increasingly looks like the games themselves could be the catalyst for a significant downturn in China’s stock market and economy.

Steps haven’t been enough

Observers already knew that China was serious about cutting air pollution in Beijing and that, if necessary; the government would shut down factories and power plants. Pollution had been one of the reasons China lost its 1993 bid to host the 2000 Olympics, and this time around, the country promised the International Olympic Committee that it would clean up Beijing’s act before the games.

Officials converted coal-fired furnaces to natural gas. Factories have been relocated to the suburbs. Millions of trees have been planted to break the winds that blow dust in from the plains north and west of the city. Older taxis have been replaced with 80,000 newer models that produce less pollution. Heavy trucks are permitted to enter the city only at night. The city expanded its subway system and built a rail line to connect the airport to downtown.

And it still hasn’t been enough. Thanks to China’s rapid economic growth and Beijing’s own stunning growth — the local economy is up 144% since 2000 — car ownership has soared. The city has 3 million vehicles and is adding 400,000 cars and trucks a year. Power plants burn cleaner, low-sulfur coal, but they burn a lot more of it: 30 million tons in 2007. A building boom has added 1.7 billion square feet of construction since 2002, contributing to the city’s problem with dust. Daily concentrations of particulates in Beijing equal those in New York, Los Angeles, Washington, Chicago and Atlanta combined.

Desperate for solutions

The only way for the government to deliver anything close to the air-pollution targets it has promised is to enforce a Draconian short-term fix: Shut down the sources of pollution for the duration of the games. Some coal-fired power plants, cement factories, steel-making plants and chemical plants in Beijing, Tianjin and four neighboring provinces will be shut for 30 days before the Olympics begin Aug. 8. Ten major polluters have already been shut, according to the State Environmental Protection Administration.

Some factories that remain open will not operate at full capacity. For example, Shougang, this year China’s second-largest producer of construction-grade steel, will cut production in half, to 4 million metric tons.

The only good thing I can report is that it was a sunny day and you could see the blue skies in Beijing. That was really really nice!

Rating 3.25 out of 5

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