China's Olympics Won't Be What Beijing Had Hoped

Rioting in Tibet and other developments are marring China's image as Beijing prepares to host the summer games.

By Andrew C. Schneider, Associate Editor, The Kiplinger Letter

April 1, 2008

China's public relations nightmare will blight its Olympic dreams. Recent riots in Tibet, and Beijing's heavy-handed response, are just the latest in a series of debacles tarnishing China's image. Others include the country's poor air quality that threatens the health of athletes, China's support of Burma's military junta and its since-reversed opposition to sending UN peacekeepers to Darfur.

Though the opening ceremonies of the Beijing Summer Olympics are more than four months away, the damage has already been done. "On top of all its extraordinary economic success, this was supposed to be a capstone party, proclaiming China's role as a leader on the world stage," says Elizabeth C. Economy, director for Asia Studies at the Council on Foreign Relations. "But every one of the worst scenarios the Chinese leadership could have imagined could have come true has happened."

A full-fledged boycott of the games isn't in the cards. Several European leaders -- notably French President Nicolas Sarkozy and German Chancellor Angela Merkel -- will refuse to attend the opening ceremonies as a mark of their displeasure. But there won't be a repeat of the 1980 Moscow Summer Olympics, when several countries followed the U.S.' lead in boycotting the games in response to the Soviet invasion of Afghanistan.

The U.S. will continue to call for Beijing to exercise restraint in Tibet, but nothing more. Nor is there likely to be much of a negative economic impact on the games. Sponsors may express public dismay regarding China's actions, but they're reluctant to pass on any opportunity to put their brand in front of China's 1.3 billion consumers. They'll continue to convey regret for the violence, but they'll stick to the line -- as Beijing does -- that the games should be about the athletes. U.S. sponsors of the games include Coca-Cola, McDonald's, General Electric, Kodak and Visa.

In the case of the Tibetan issue, the irony is that China's government had sought to avoid a violent clampdown, precisely because it recognized how it might affect the games. Beijing already had reason to fear that Tibetan activists would seek to disrupt the Olympic torch route, which will include a climb up Mount Everest on the region's border with Nepal. To avoid further negative publicity, Beijing initially tried using a softer touch than usual to contain what were annual demonstrations commemorating a failed 1959 uprising against Chinese rule. Instead, the demonstrations turned ugly, with Tibetan rioters attacking businesses run by ethnic Chinese and Chinese police responding with lethal force. Private intelligence service Stratfor summed up the result: "China [appeared] to be simultaneously repressive and helpless -- the worst of both worlds."

China's poor air quality worries many athletes. Ethiopia's Haile Gebrselassie, world record holder and favored to win the men's marathon, won't be the last athlete to drop out of an event due to health concerns. Beijing's smog is likely to make participants in any outdoor event think twice about how badly they want a medal. The International Olympic Committee's (IOC) Medical Commission recently conducted a review of Beijing's air quality and determined that air pollution could pose a health risk for "outdoor endurance events that include minimum one hour continuous physical exercise at high level." These would include not only the marathon but urban road cycling, mountain biking, marathon swimming, the triathlon and road walking. The IOC plans to strictly monitor air quality throughout the games, and those athletes who do decide to participate may find their events postponed.

Olympics have faced the threat of smog before. Athletes expressed concerns before the Summer Olympics in Los Angeles in 1984, in Atlanta in 1996 and in Athens in 2004. But such comments are particularly embarrassing for China. Its leadership has been concerned for years about the effects of environmental degradation and has been striving to clean up Beijing's air in time for the games. That it has proven unable to do so is fresh evidence that the nation's central government, having yielded much of its economic authority to local government and businesses, has limited ability to restrain growth.

According to a World Bank study published last year, the combined costs of outdoor air and water pollution to China's economy total roughly $100 billion a year, equivalent to 3.4% of China's gross domestic product in 2007. Such costs manifest chiefly in terms of higher rates of illness -- ranging from cancer and respiratory ailments to diarrhea. These translate not only into a drag on the economy from larger medical bills but also from higher rates of workplace and school absenteeism. Water pollution is also contributing to the country's growing water scarcity problem. That's hurting Chinese agriculture, forcing the nation to import more of its food, which in turn exacerbates inflation.

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