Report: Olympics good for China's economy

Games will boost appeal for business, tourism

SHANGHAI -- At $20 billion and counting, the Beijing Olympics may be the most costly games ever, but they will be a boon rather than a boondoggle for China's booming economy, ratings agency Standard & Poor's said in a report released Tuesday.

The huge investments in city infrastructure and facilities will enhance the Chinese capital's appeal for business and tourism, likely strengthening Beijing's financial status overall, Standard & Poor's credit analyst Kim Eng Tan said.

"Rather than a financial burden, hosting the Olympics could give a long-term boost to the city government's creditworthiness," he said.

For some past host cities, Olympics-related investments have proven to be costly white elephants. It took Montreal more than 20 years to finish paying off its 1976 Winter Games.

The cost of Beijing's lavish preparations for the games has been inflated by surging prices for construction materials and other commodities, pushing the likely total bill above $20 billion, the report said.

But it noted that much of that spending is on subways, airport passenger terminals and other facilities that will serve the city in the long-term, much as Barcelona's construction ahead of the 1992 games contributed to its development.

Many of the spectacular Olympic venues, meanwhile, have been designed to serve commercial purposes after the games end, or are located within universities and other educational institutions, ensuring their continued use.

With sponsors forecasting sellout crowds for virtually all events, ticket revenues are likely to exceed those of many previous games, the report said.

"Indeed, the Beijing Olympics could be one of the most financially successful games in terms of revenue receipts," it said.