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Financial Stakes are High for 2008 Beijing Olympics


The 2008 Summer Olympics in Beijing will be an ideal opportunity for the Chinese government to showcase their country on a global stage. But greater exposure also means greater risk for the growing Communist nation.

The Chinese government has allotted $40 billion (U.S.) for construction projects such as the National Aquatics Center. Some of those funds are also earmarked for improvements to Beijing's airport and mass transit.

With such a huge budget, there are also concerns about corruption.

Professor Lisa Neirotti is the Sports Management Director at George Washington University. She says the government needs to address these concerns through a more streamlined business structure. "Now for China, with all of these new venues, they really need to focus on the structure: who's going to be managing those facilities, what kind of programming they're going to put in there."

China recently announced a new supervisor for its construction projects after Beijing's Vice Mayor was dismissed on corruption charges. Wu Jingjun, spokesman for Beijing's 2008 Projects and Construction Headquarters Office, made the announcement.

"Xu Bo, head of Quality and Safety Department of Ministry of Construction, was transferred to Beijing's 2008 Projects and Construction Headquarters Office to ensure the quality of Olympics construction. We have taken a series of supervisory and auditing measures," he said.

Analysts say it was a necessary move, to avoid negative press. Like other countries that have hosted Olympics games in the past, Neirotti says China is expecting significant financial returns based on a positive perception of the upcoming summer games.

"They [China] make money primarily off of sponsorships, off of broadcast revenues, and off of ticket sales."

There is also the opportunity for long-term profits for international businesses. For example, the U.S. credit card company, Visa, is hoping to use the Beijing Olympics to expand its business to China, home to more than 1.3 billion people.

"Only five percent of the Chinese population has a credit card, owns a credit card. So for Visa, this is a tremendous opportunity to increase market share," says Neirotti.

But China's increased exposure may also mean closer worldwide scrutiny of some controversial issues. "As we've all heard, there [are] issues with the environment and pollution, that's really going to affect the athletes, as well as the spectators, and future tourists."

And future tourists represent more revenue in the years to come. Neirotti and others say this gives China greater incentive to continue making new advances, while also embracing its past.

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