How Much Money Will China Lose on the Olympics and Is It Worth It?
The 2022 Winter Olympics will start in China on Feb. 4. How much money will China lose on the Winter Olympics and is it worth holding the event?
The 2022 Winter Olympics will start in China on Feb. 4. The event has become controversial. Several countries including the U.S., U.K, Canada, Denmark, and Australia are boycotting the Winter Olympics diplomatically over China’s human rights record. How much money will China lose on the Olympics and is it worth holding the event?
Apart from the games and geopolitics, the Olympics also have a cost-benefit conundrum. The cost of holding these mega gaming events has escalated greatly over the years.
How much money is China spending on the 2022 Winter Olympics?
Initially, China budged $1.6 billion for the 2022 Winter Olympics. The country now claims that it will spend close to $3.9 billion on the games. That’s still a low price tag considering what other countries have spent to host similar events in the past. For example, China is believed to have spent almost $50 billion on the 2008 Summer Olympics.
Apart from China and Kazakhstan, all of the other countries pulled out their bid for holding the 2022 Winter Olympics. The costs associated with holding the games are among the reasons even some wealthy countries pulled out from hosting the games.
The official spending figure of $3.8 billion is a tiny fraction of China’s $17.7 billion GDP. Incidentally, in 2021, China’s GDP surpassed that of the European Union and it's quickly catching up to the U.S.
What's the real cost of the 2022 Winter Olympics in China?
Most people don't trust the official numbers coming out of China, and the official budget estimates of the Winter Olympics aren't an exception. According to an Insider investigation, China’s actual spending on Winter Olympics is over $38.5 billion, which is almost ten times the official number.
In the investigation, the Insider also accounted for infrastructure spending related to the games, including a $9.2 billion bullet train project.
How much will China earn from the 2022 Winter Olympics?
Usually, countries holding Olympic events earn from ticket sales, television rights, and the influx of foreign tourists. However, given the COVID-19 pandemic and China’s zero COVID policy, it won’t earn from foreign spectators. The country has also stopped selling tickets to domestic citizens amid the rising cases of the omicron variant of the COVID-19 virus in the country.
China will mainly earn from television rights. Even there, the International Olympic Committee gets to keep the lion’s share.
China will lose billions on the Winter Olympics.
Even going by the official estimates, China will end up losing billions on the 2022 Winter Olympics. However, it's important to not just look at the monetary angle alone. Hosting such prestigious games has other implications as well.
The 2008 Olympics helped China portray itself as a rising global superpower. The spending associated with the event also helped its economy amid the Global Financial Crisis. In 2022, China is facing a growth slowdown, which is getting complicated amid the real estate crisis.
China wants to project itself as a superpower.
China wants to be seen as a global superpower. However, the Winter Olympics have only put its abysmal human rights record, especially towards the Uighur Muslim community, in focus. The Peng Shuai episode hasn't helped matters either.
To make things worse, the torchbearer for the Winter Olympics is a military official who was involved in a violent clash with India in 2020 where India lost 20 soldiers. While China officially acknowledged that five of its personnel also died in the clash, independent observers put the number much higher than the official figure.
Overall, the Winter Olympics might not do much to help project China’s soft power, which is an ancillary benefit of holding these events. The diplomatic boycott by multiple countries only adds to the financial loss associated with the event.