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Olympic impact on CPI 'limited'
By Rong Xiandong Staff Writer
Updated: 2008-06-17 13:42


Professor Xie Taifeng, vice dean of the Finance School of Capital University of Economics and Business, talked about the economic impact of the Beijing 2008 Olympics in an interview with Rong Xiandong of Does the Olympics have any impact on consumer price index (CPI) in the host city Beijing? If any, what kind of impact will it have?

Professor Xie Taifeng pictured in this 2007 file photo during an interview with CCTV. []

Xie: In my opinion, the Olympics will inevitably have some effect on CPI in Beijing. Consumer goods and services will be in great demand as domestic and overseas tourists flock in during the Games, thus pushing up consumer prices. About 4.4 million overseas tourists and 150 million domestic tourists are expected to come to Beijing this year. Therefore, prices in the catering, travel, hotels and accommodation markets will climb remarkably.

However, price increases resulting from the Olympics are temporary rather than perpetual as shrinking market demand will drag down the prices after the Games.

Some think that the Olympics has played an important role in pushing up the housing prices and rents in Beijing, especially in areas near the Olympic venues. Do you think housing prices and rents will fall soon after the Olympics?

I don't think the Olympics is an important contributor to the fast rises in Beijing's house prices. The rises are seen nationwide, including those cities other than the Olympics host and co-host cities.

Beijing's house rents will increase to a large extent as large numbers of domestic and overseas tourists pour in during the Olympics. But the rents will drop after the sports event.

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According to an online survey conducted by the Internet company Tencent in Beijing, Shanghai and Guangzhou, 58.6 percent of those surveyed think consumer prices will rise during the Olympics and big price increases will appear in the cities that will play host to Olympics matches. About 12.4 percent of the interviewed hold that prices will climb only in Beijing and the co-host cities.

The findings are objective, I believe. Hosting the Olympics will surely lead to price increases, but mainly in the host and co-hosting cities.

Nationwide impact of the Olympics on CPI will be limited as economic power of the cities only accounts for a small part of the national economy.

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