THE BIGGEST EARLY LOSER of the Olympic Games was Chinese share prices. Malcolm Moore, in the London Daily Telegraph, noted on 11 August: “The looming threat of inflation and a post-Olympic hangover sent China’s stock exchange to a 20-month low today. That makes Shanghai the world’s worst performing index this year. The composite share index has lost almost 60% since last October.”
Investment group Goldman Sachs published a research note predicting a gloomy post-Olympic period for the Chinese economy. A Beijing blogger, reflecting a wider mood, complained: “The government has spent all the money on the games instead of actions to help the market.”
But most experienced financial analysts attribute the sharp decline in Chinese equities essentially to broad economic fac- tors. Those are much higher inflation in China and global economic weakness.
Goldman Sachs says while the longterm impact of the Olympics on China’s economy will be negligible, the short-term effect increasingly looks like being negative. That’s because China has spent about US$70bn not only on stadium and gamesrelated infrastructure but also vitally on drastic economy-hitting measures to curb chronic pollution problems.
The Olympic games have also turned a glaring focus on many Chinese sociopolitical shortcomings.
The Soccer World Cup in 2010 could also have consequences for SA, different as they may be from China’s situation.