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If we were to drive around Colombo, the one thing that we see is the beautification of the city taking place in view of CHOGM that is to be staged in Sri Lanka shortly. The thoughts that crossed my mind was how China stages the Beijing Olympics in the background of every Olympics before being a huge financial drain on the country and how China beautifully architectured a hidden agenda from a more macro perspective.
China’s hidden logic?
The Beijing Olympics had cost China a staggering 40 billion dollars. Some even said it will be as high as 60 billion dollars with all indirect cost added. History revealed that the 2004 Greek Olympics had cost the country only a 12.5 billion dollars but had shaved off almost two percentage points off the GDP that year and had even dented the EU’s economy and some say that it triggered the financial collapse of the Greek economy that extended to the EU.
However, China made sure that history will not be allowed to be repeated when a country stages an international event, which sure is a cue to Sri Lanka in the jaws of hosting a mega event like CHOGM. Let me throw more light on to the China strategy.
China’s strategy – Urbanisation
World Bank states that China’s outward oriented industrialisation began in the 1980s and the urban population was at 19.6% of the country’s total population. With the accelerated development drive by 2005, China had recorded an urban population of 42.9%, beating India (23.1%), Pakistan (28.1%) and Indonesia (22.1%), which gives us the pace at which China was charging ahead.
This rural to city drive has had many ramifications. China had to ensure there is continuity on the jobs and ensure that there will be no urban shanties like what happened in South America. The road efficiency had to be improved so that productivity levels can be maintained. Step change infrastructural improvements had to be done on energy, water treatment waste disposal and protecting the environment so that the quality of life will be in sync to the developmental agenda.
Critiques say that urbanisation helped China achieve double digit growth but some argue that it is the development that caused the movement of people from the rural areas to the city, hence urbanisation. Whatever it may be, the reality was that better educated rural youngsters injected entrepreneurship and dynamism to the urban labour market and the money earned was sent back to the villages which bolstered the rural household consumption.
This two-pronged income increase seen in the urban areas and the rural helped China grow and today it is one of the most admired nations for economic growth. Today what is being revealed is that the staging of the Olympics was not an accident but a careful orchestration by the policymakers of China. What they did was that they conceptualised the Olympics into the Chinese growth agenda given the need for urbanisation.
China issue – 570 m people
However, China had a problem on this urbanisation drive The urban population has increased from 191 million seen in the 1980s to 570 million in 2005, which demanded an massive investment in the transport, infrastructure, water management, waste management and the environment so that the quality of life of a Chinese in the urban areas could be maintained. If this was not done, China was heading into a crisis on the quality of life that can have serious ramifications to the country but also on the development drive of investing Foreign Direct Investment.
Olympics as a strategy
In this backdrop China won the coveted award of the ability to hosting the greatest sporting event of the word – the Olympic Games. The crafty policymakers in China did not allow a tactic to dominate the strategy but instead used the Olympics to fit into the overall strategy of urbanisation. It was a hand-in-glove strategic fit. Based on the post games press conference, it is very clear that the policy makers were aware of the economic debacle that took place due to the Greek Olympics in 2004 and was determined not to let that happen to China.
With this strategic thought in mind, China embarked on one of the most passionate and aggressive development agendas of the world. It is said that almost 90% percent of the cranes in the world were in China between 2004 and 2008. The Chinese Government pumped in a colossal US$ 40 billion into the developmental agenda of the Olympics, powering an economic drive at blistering pace that even made the economy overheat with a GDP growth above 11%. It was for sure a One World One Dream theme for the people of China. The vision set out by the Chinese policymakers made up a happy marriage – a new Beijing and great Olympics.
Beijing – 5-year City Plan
The brilliance of the master plan was such that the Beijing Olympics infrastructure was crafted in such way that it fitted the 5-year City Plan and was no way done to just cater to the short term Olympics requirements. From the 40 billion dollars that was invested in the Beijing Olympics, almost 26 billion dollars was spent on improving transportation. This was incidentally a key issue identified in the urbanisation process that gives us an idea of the strategic mind set of the Chinese.
The transportation improvements included railway hubs and new railway lines, improvements on the Beijing subway, Tiajin expressway to be upgraded so that interaction with the outside world is easier and stimulates economic growth based on the principle of connectivity. The hidden agenda was that with this improvement, all regions will be linked to the expressway.
In addition to this developmental strategy airports express lines were set up, Olympic extensions were crafted so that the end objective was that the urbanisation agenda took centre stage on the development pathway. One key point stressed by the policymakers were that post games utilisation of all infrastructure was at its maximum.
Hence the world saw how the Olympics could be used as a vehicle to drive aggressive development but on the bigger game plan that has been conceptualised. The Olympic spirit resulted in the speed on each project at Bolt pace. To my mind it was a master stroke by the super power nation that we may not see in the near future.
Another 10 billion was pumped into energy and Infrastructure which included improvements on housing conditions, relocation of construction sites and development of commercial sites as per the overall 5-year master plan. Five new transformer stations were constructed that can generate 220 kilovolts of power. Nine garbage treatment centres were built. The latest technology was used in all construction which has been scientifically assed by the top scientists of the world.
The 10 billion investment on infrastructure included a sewage treatment facility, 12,700 sports facility areas, 67 theatres and 72 places for performances that sure catered to the urbanisation strategy that China was driving towards. Once again a master stroke from the specialists of the new age world.
Another 2.3 billion dollars was invested for water resource management that included 11 water treatment plants which can increase productivity to 525,000 cubic meters per day of clean water which was once again on the five year city plan. Another 2.5 billion was set aside for the development of the urban environment. Currently the forestation in the city is as 51.6% so that every 500 metres a green park is accessible to a new age Chinese. This will facilitate cleaner air. But the classic to my mind was that the 1.9 billion dollars invested on the venues which were designed in a way so that six of them were erected on the Beijing University area itself which explains the strategic thinking that was in play.
Beijing – ready for 1,000m?
The Chinese being the catalyst of the new world order of today had scientifically evaluated all development for a time horizon of 100 years from now so that the dream of ‘New Beijing and great Olympics’ can be sustained. Apparently, there had been numerous simulations done to determine what shape Beijing will take form when the urban population grows to 1,000 million from the current 570 million. This explains the hidden economic agenda the master craftsmen of China had that Greece did not have.
Latest research reveals that the strategic objective of the 5-year city master plan was to enhance the quality of life so that the dream of a new Beijing will become a reality. In 2007 the per capita income of the rural people increased to US$ 3,234, up from the 1,406 dollars in 2002. The total developmental program increased income of the rural residencies by 9.1%and the urban residencies by 11.5%, which mirrors the master plan drawn up.
The Olympics was used to fast track the overall urbanisation process. During the 5-year horizon, 2.63 million people secured employment. The unemployment rate reduced to a marginal 2.3%. The challenge will be as to how this is to be sustained during the post games period. Apart from the above, overall housing conditions have improved and the convenience of transport has helped improve productivity. There has been an improvement on the cultural side of life.
Hence we see that the 40 billion dollar investment has been done with the bigger picture in mind and is a work of art that the world must salute. Chinese policymakers have proved why China is the super power nation of the new world order. May be the future hosts of Olympics can take a cue from this Chinese masterpiece, whilst it is also a cue for Sri Lanka as we prepare for CHOGM.
Implications for Sri Lanka
Whilst the overall entrepreneurship by the policymakers of China must be commended, a point to highlight is the issue China was up against during pre Olympic times. It was the alleged human rights issues in China. In city after city when the Olympic torch was being taken protests started gathering a momentum that ultimately led to some countries wanting to pull out. The lesson to the world is that before we embark on a public relations drive by an organisation, we need to ensure that one’s house is in order.
We see a similar situation unfolding in Sri Lanka with Canada pulling out and the Indian Premier citing domestic issues and not coming for CHOGM whilst even Prince Charles wants to address the killing of a British national on his visit to Sri Lanka. I guess we are up against a challenge just like China was and how we rally around as a nation will determine how we manage the November showcase to the world.
(The author is a multiple award winning marketer and business leader. The thoughts expressed are his personal observations and not the views of any organisation he serves in Sri Lanka or in the South Asian region. Rohantha has a double degree in Marketing and an MBA and is currently reading for a doctorate in business.)
