By analyzing the history of different cities hosting the Olympic Games, we can draw the basic conclusion that the economy of each host country is at a boom high during the Olympic Games, and the pull of the Olympics on the economy reaches a peak in the two years before the Olympics. Beijing Olympics, the host city benefited more, the overall economic benefit is limited. The boost to industries from the Olympics was mainly concentrated in the construction, transportation and communication, and social service industries.
The Beijing Olympics will significantly boost Beijing's GDP growth, averaging about 2.3 percentage points per year between 2003 and 2007, with the pulling effect peaking in 2008. We believe that eight major sectors, including tourism, commerce, real estate, construction, transportation, sports, science and technology information, etc., will have significant opportunities for development in Beijing's Olympic economy; at the same time, as a platform to showcase China's image to the world, some of China's brand names will see their value enhanced.
According to the stock market performance during the Olympic Games in various countries, combined with China's macro-economy in 2008 before the high growth trend can be maintained, we believe that the Beijing Olympic Games as a clear theme of the plate will also have a significant upward space can still be used as a key investment direction in the future.
In terms of investment strategy, we suggest that the initial focus on infrastructure, construction, building materials, real estate, information technology, and in the next year, the focus shifted to consumer-oriented industries, business, tourism, food and beverage, Olympic-related business. From the perspective of less overall risk, the portfolio under the Olympic theme should be dominated by service-oriented stocks such as information, commerce, hotel and tourism. As the date of the Olympics draws nearer, the thematic allocation is gradually reduced to avoid the systemic risk of Olympic-themed investments.
We give three types of portfolios for the Beijing Olympics, one is a portfolio of investment products favoring the initial fixed investment benefit, focusing on recommending Beijing Urban Construction, Yangtze River Precision Industry, Gehua Cable; the second is a portfolio of consumer goods favoring the consumption and services benefiting from the hosting period, focusing on recommending China Youth Travel Service (CYTS), Shouyun Stock, Wangfujing; the third is a portfolio of investment products benefiting from the brand enhancement of the Olympic Games, suggesting that attention be given to the brand enhancement of the Olympic Games, suggesting that attention be paid to the brand enhancement of the brand enhancement of the Olympic Games. The debut of the Huadi shares, Yanjing Beer, Yili shares three companies.
The Olympic Games is the world's most influential and widely participated in the sports event, has not only affected the development of sports and cultural products and services and other industries, but more y affect the economic growth of the host city, pulling the development of the regional economy, which in turn has a significant impact on a country's economy. Therefore, the competition for the right to hold the Olympic Games is very fierce, and once the right to hold the Games is obtained, the opportunity will be fully utilized. On the one hand, the stage of the Olympic Games will be utilized to demonstrate to the world their achievements in economy, culture, scientific and technological progress, social development and so on, and on the other hand, the strong demand brought about by the hosting of the Olympic Games will be utilized to strive to stimulate the growth of their own regions and national economies, and to promote the leap of their economies to a new level of development.
Beijing is the first city in the world to host the Olympic Games.
Beijing's success in obtaining the right to host the 2008 Olympic Games will boost the development of many industries, such as infrastructure construction, science and technology information industry, sports industry, media and advertising, environmental protection, tourism industry, education industry, etc., and stimulate the rapid growth of the neighboring economic circle and domestic economy. In this process, industries and listed companies related to the Olympic theme will gain new development opportunities, thus bringing significant investment opportunities for stock market investment. In order to better understand the Olympic economy and grasp the investment strategy under the Beijing Olympics, we combined with the experience of many Olympic Games host cities, to give a thematic analysis of the investment strategy under the Beijing Olympics.
1 Olympic Economy and Basic Characteristics
1.1 What is Olympic Economy
Olympic Economy is a series of economic activities carried out by the host city of the Olympic Games in the period of preparation for and hosting of the Olympic Games, as well as a period of time after the Olympic Games, by taking advantage of the resource advantages of the Olympic Games and the business opportunities created by the Olympic Games, so as to stimulate the economic development of the region and bring a stage of accelerated economic development to the host city and the country. The economic phenomenon that brings about accelerated economic development in stages to the host city and the country.
Olympic economy can be divided into direct Olympic economy and indirect Olympic economy two major parts, direct Olympic economy is to host the Olympic Games and economic activities around the development of Olympic resources and economic activities; indirect Olympic economy refers to the direct Olympic economy in addition to the Olympic Games in the whole process of organizing the Olympic Games, can be caused by the host city and the country's economic and social indicators of the change of activities. Specifically include: direct Olympic economy: 1, directly for the hosting of the Olympic Games and the economic activities, such as competition venues and related facilities and investment in investment pull; 2, around the development of the Olympic Games resources for economic activities, such as the development of the Olympic Games market, mainly by the sponsorship program, licensing program consists of the sale of television broadcasting rights, sponsorships and sponsorships and ticket revenues, the various sectors of the proprietary sponsorships, etc.; Indirect Olympic economy means that in addition to the direct Olympic economy; indirect Olympic economy refers to the entire process of the host city and the country can cause changes in economic and social indicators. Sponsorship of sponsors; Indirect Olympic economy: the host city to take the opportunity of the Olympic Games, the development of the regional economy, accelerate the construction of the city of various economic activities, such as infrastructure construction, industrial restructuring, national quality improvement, ecological environment improvement, new growth points and the cultivation of new industries.
1.2 Stages of the Olympic economy
From the successful bidding to the official hosting and the extension of the economic, political, cultural and other effects of the Olympic Games, forming a complete Olympic economic cycle, the international community is usually set at 10 to 12 years.
The Olympic economy is generally divided into three phases: the pre-Olympic phase, the Olympic phase and the post-Olympic phase, each of which presents different characteristics of economic development:
An Olympic economy is divided into three phases, the period of preparations for the construction of the Olympic Games (2001-2007), the period of the Olympic Games (2008) and the latter part of the Olympic Games (2009-2010). The main performance characteristics of the Olympic economy in each stage are:
(1) In the period of preparation for the Olympic Games, the Olympic economy is mainly through the Olympic investment in China's economy. Olympic investment can be divided into direct and indirect investment. Direct investment refers to the investment directly used in the construction of Olympic competition venues and related facilities, mainly including competition venues, athletes' villages, press villages, media communication facilities. Indirect investment mainly refers to investment that is needed even if the Olympic Games are not organized, but which is advanced or intensified because of the Olympic Games. These investments include investments in transportation projects such as improving roads, airports, and subways, municipal construction projects such as water, electricity, heat, and gas, and environmental protection costs such as pollution control, pollution management, and greening. The Olympic investment will mainly drive the development of Beijing's construction, building materials industry, communications industry, environmental protection industry, scientific research and comprehensive technical services, and through the conduction effect and radiation effect ripples upstream and downstream related industries and other regions of the country.
(2) During the period when the Olympic Games are held, the economy will be driven by the increase of external effective demand. These external effective demands include: domestic and foreign travelers going to China and Beijing for the purpose of the Olympic Games before and during the period of the Olympic Games, and the economic and consumption activities triggered by these travelers. These will add additional consumer demand in China and Beijing, which will be concentrated in areas such as transportation, post and telecommunications, health and sports, social services, commerce, catering, education, culture, arts, radio, film and television. It can be assumed that the Olympic investment is to a large extent a prior investment to meet this external effective demand as a way to increase its effective supply.
(3) In the later stage of the Olympic Games, as the Olympic Games enhance the popularity of the host city and country, and make the host city's economic scale and basic soft and hardware facilities jump to a new level, which injects new vitality into the foreign economic exchanges and the subsequent sustainable development of tourism of the host city and country of the Olympic Games. For different regions, the intensity of the role played by the Olympic economy varies. For Beijing, since most of the Olympic investment and the main Olympic events are concentrated here, the economic promotion effect of the Olympic Games on the Beijing region will be direct and obvious, while for the rest of the country, it will be more through the Olympic investment and the expansion of market demand, and indirectly share the economic growth brought about by the Olympic Games.
2 Historical experience of the Olympic Games
The concept of Olympic economy originated from the 1984 Los Angeles Olympic Games, the U.S. business wizards, Uberroth creatively combined the Olympic Games and business, so that the Los Angeles Olympic Games became the "first money-making Olympics". Before that, the Olympic Games are to lose money to the end, especially the 76 years of the Montreal Olympic Games, 15 days of the Olympic Games to make the city of Montreal indebted to 20 years, known as the "Montreal Trap". Since the Los Angeles Olympics, the concept of the Olympic economy has emerged, and the Olympics have brought enormous benefits to the host cities.
2.1 Tokyo Olympics (1964)
Japan, as a defeated country in World War II, was in dire straits in the 1950s. It was because of the 1964 Tokyo Olympics that the Japanese government made the hosting of the Olympics a national cause, incorporating it into the National Income Doubling Plan. The government invested heavily in large-scale construction of public **** business, these large-scale infrastructure construction led to the rapid development of manufacturing, construction, services, transportation, communications and other industries, resulting in what is known as the "Tokyo Olympic boom" economic prosperity. After the Tokyo Olympics, Japan's gross national economic output exceeded that of Britain and France in 1967 and West Germany in 1968, becoming the world's second largest economy after the United States.
2.1.1 The Impact of the Tokyo Olympics on the Japanese Economy
The amount of money invested by Japan to prepare for the Tokyo Olympics was the highest in the history of the Olympics at that time, and if all the investment in all the related businesses was included, it was as high as 1 trillion yen, which was about 3 billion dollars according to the exchange rate of 360 yen for 1 US dollar at that time. Among them, the competition facilities and Olympic Village investment of 16 billion yen, operating costs of 6 billion yen, roads and other 82.5 billion yen, which totaled about 100 billion yen, and the rest is for the sudden completion of the Tokaido Shinkansen, the Metropolitan Expressway, the Tokyo Elevated Monorail Electricity, the Tokyo Metro and the transportation network of the entire preparation and investment.
2.1.2 Impacts of the Tokyo Olympics on different industries in Japan
The production and employment effects of Olympics-related investments varied across industries. What we analyze below are the effects of the 1964 Olympic investments on different industries in Japan. In terms of production effects, the service sector investment brought about the largest increment in GDP, accounting for 45.2% of the total increment in GDP of all related industries, followed by construction at 21%, transportation and communication at 19.4%, and manufacturing at the least at 14.4%. In terms of employment effect, the manufacturing industry had the largest increase in employed population, accounting for 32.3% of the total increase in the population of related industries, while the construction and transportation and communication industries were flat, with an increase of 180,000 people or 27.7%. And the employment effect of the service industry was 12.3%.
In-depth analysis, because in the year of the Olympic Games, domestic and foreign travelers are concentrated into the Olympic host country, the service industry's inputs in the early stages of the release of the concentration of the largest share of the incremental increase in gross domestic product in that year. Similarly, due to the completion of construction projects and the transportation and communications industry to serve the Olympic Games, the combined contribution of the two also accounted for 40%. Comparatively speaking, the distribution of the increase in manufacturing output value in the Olympic cycle for many years to reflect, so in the Olympic Games held in the year accounted for a relatively small.
2.2 South Korea Seoul Olympics (1988)
The 1988 Seoul Olympics enabled South Korea to complete the process of transformation from a developing country to a newly industrialized country. According to South Korea's official statistics, 1981-1988 seven years, the Olympic project to make South Korea's employment increased by 336,000 people, preparations for the Olympic Games *** brought the equivalent of 7 billion U.S. dollars of production-induced effects and 2.7 billion U.S. dollars of national income-induced effects, the average annual rate of economic growth reached 12.4%, 1985-1990, the per capita GDP increased from 2,300 U.S. dollars to
2.2.1 Impact of the Seoul Olympics on the Korean economy
Investment in industries related to the Seoul Olympics began in 1982, when the amount of investment in the Olympics and its related industries was no more than 0.3% of the total investment in the country, and then gradually increased, reaching 477.3 billion won in 1985 (3.7 billion dollars at the rate of 1,300 won per dollar), which accounted for 4.7 billion dollars of the total investment in Korea. billion dollars), accounting for 2.1 percent of Korea's total domestic investment at the time.
Between 1982 and 1988, the Olympic *** investment of 2,382.6 billion won led to an increase in GDP of 4,750.4 billion won, with an investment multiplier approximating 1.7. In contrast, of the total domestic investment of 155,593 billion won in 1982-1988, the Olympic investment accounted for 1.5 percent of the total investment.
The direct effect of the above investment is that the economic benefit generated by the investment in 1982-1988 was equivalent to 0.4% of Korea's GNP in 1982-1988; at the same time, the direct increase in employment opportunities by the investment in the Olympics-related industries amounted to 336,000 jobs in the period of 1982-1988, and at the end of 1988, the incremental increase in employment accounted for 0.5% of the number of people employed by Korean industries. of 0.5%.
2.2.2 Impacts of the Seoul Olympics on different industries in Korea
The effects of production, income and employment resulting from investment in Olympics-related industries varied considerably in terms of industry distribution. The following analysis shows the effects of Olympic investments on different industries in Korea during the period 1982-1988. In terms of production effects, the manufacturing sector generated the largest incremental GDP of 1,648.3 billion won, or 35 percent, followed by the construction sector at 33 percent and the service sector at 20 percent. In terms of employment effects, the service sector generated the largest increment in employment at 150,000 people, or 45.8% of the total increment in population in related industries, followed by the construction and manufacturing sectors at 28% and 16%, respectively. We observe that over a longer time period, i.e. from the beginning to the end of the Olympic-related investments, the increase in the value of production in the industries triggered by the investments is more evenly distributed, with manufacturing and construction contributing the most, together accounting for 68% of the incremental GDP, and the service sector slightly less.
2.3 Sydney Olympics, Australia
The 2000 Sydney Olympics were described by former IOC President Samaranch as "the best Olympics ever", and won a good reputation for Australia. More importantly, Sydney's preparation for the Olympics greatly promoted urban construction, improved the ecological environment, and facilitated the development of transportation, tourism, real estate and other related industries, thus greatly enhancing Sydney's popularity and improving its status in the world.
2.3.1 Impact of Sydney Olympics on Australia's Economy
According to the statistics of the Australian Tourist Board, the tourists induced by the Sydney Olympics, the total number of tourists from 1997 to 2004 *** reached 2 million people, and Australia gained a benefit of nearly 10 billion dollars. Also according to the Australian Regional Center for Economic Analysis, the Sydney Olympics brought huge economic benefits to Australia, directly bringing 6.5 billion Australian dollars in economic activity, of which the state of New South Wales, where Sydney is located, accounted for 5.1 billion Australian dollars. From 1993 to 2004, the economic benefits received by the state as a result of the Olympic Games are expected to amount to $3.1 billion. Australia's average GDP growth rate of 4.7 percent from 1993 to 1999 exceeded that of the average developed country.
In the lead-up to the Sydney Olympics (1994-1999), the Sydney Olympics stimulated the economy by boosting investment, which was significantly greater in New South Wales, the state in which Sydney is located, than in Australia as a whole, with most of Australia's 0.17 percent growth contributed by New South Wales's 0.4 percent growth. In the year of the Olympics (2000), the accelerated economic growth was driven more by a boost in exports, where the large increase in exports was mainly due to the sale of television rights and tourism exports targeting foreign tourists. In the post-Olympics phase, the pull of the Olympics on various economic indicators slowed down significantly, and some indicators even showed some decline.
Because of the Olympic Games itself is subject to regional limitations, the Olympic Games on the host city area of the economic pull is much larger than the country's overall economic pull. Japan and South Korea hosted the Olympic Games on the economy as a whole had a huge boost, mainly because both countries hosted the Olympic Games when the economy is relatively small, and Tokyo and Seoul in the economy and occupy a very important position, so Japan for the construction of the country's transportation network, and South Korea for the construction of Seoul to a large extent to the benefit of the country as a whole. While Australia, with its vast territory and more decentralized economic regions, is relatively less driven by regional investment, we believe that China's overall economy will benefit from the Beijing Olympics in a way more similar to that of Australia.
2.3.2 Impact of Sydney Olympics on Industries
The Sydney Olympics boosted three industries, namely construction, traffic and transportation, and private services. Before the Sydney Olympics, the biggest boost to the Australian industry from the Olympics was in the construction industry, mainly in the construction of Olympic-related infrastructure; followed by the service and transportation and communication industry, mainly in creating a favorable environment for foreign tourists' activities in the country. In the year of the Olympic Games, construction, transportation and communications, services to another level, of which services grew the fastest, mainly by a large number of tourists to participate in the Olympic activities of the demand stimulus. And after the Olympics, various industries slowed down dramatically due to the Olympics, with construction declining the fastest, and notably the real estate industry was the only industry that continued to receive positive stimulus after the Olympics.
2.4 Athens, Greece
With the 2004 Athens Olympics as an opportunity, the Greek government took the European Union investment loans and other forms of financing about 15.3 billion U.S. dollars, invested in the Athens urban infrastructure construction, so that the city of Athens has been greatly improved. These include the expansion and renovation of the two highways running east-west and north-south in Greece; the construction of the new airport of Athens - Venizelos Airport; the improvement and renovation of the city sewage system of Athens and Thessaloniki; the new construction of the metro project of Athens and Thessaloniki; the acceleration of the refurbishment and renovation of the main arterial roads around the city of Athens and the renovation of the Acropolis as the center of the city. The construction of the 689-hectare Ancient Greek Landscape Park.
At the same time, the preparation of the Olympic Games to stimulate the economic growth of Athens and even Greece, expanding employment, and promote the rapid development of industries closely related to the Olympic Games. Through the preparation of the Olympic Games, the Greek economy has been stagnant for many years has been restored, Athens economic strength has risen sharply, many important industries will be developed, of which the construction industry, tourism, manufacturing and telecommunications industry is particularly prominent. The impact of the Olympic Games on the Greek economy peaked in the two years prior to the Olympics, mainly due to the concentration of Olympic investment in those three years of spending as well as private sector investment and sponsorship. In the year of the Olympics, the entry of foreign tourists allowed tourism to contribute to the economy as an important part of exports, but tourism revenues in the year of the Olympics were lower than expected due to the lack of global promotion and publicity of the Greek tourism industry prior to the Olympics, and the failure to effectively combine the Olympics and tourism organically. However, the Olympic Games to bring the visibility of the promotion of the Greek tourism industry after the Olympic Games increased significantly, to make up for
Olympic year loss. The sharp contraction in investment after the Olympics had a negative effect on the economy, with GDP falling by as much as 1.6 percentage points in 2005 as a result.
From the previous Olympic Games, the Olympic Games have made significant changes in the host city, and in some cases even played an extremely important role in promoting the economic development of the host country, with far-reaching implications for future economic development.
2.5 Olympic trough effect
The Olympic economy will promote the host city and even the country's economic growth, which should be able to affirm through the experience of the previous Olympic Games. But the Olympic construction investment in stimulating economic growth at the same time there are negative effects. Negative effects of the Olympic economy mainly refers to the Olympic Games, investment activities greatly reduced, a large number of stadiums and facilities will be idle or underutilized, and some of the Olympic-related industries in recession. This characteristic of the Olympic economy is known as the "trough effect". The following table can be seen, in addition to the United States, other Olympic countries hosting the Olympic Games after the economic development of different degrees of decline.