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Global Economy

The price of the Olympic Games

"I have to make ends meet here and earn money. I rarely watch TV, I'm not interested in any of that," says a pancake seller in Shanghai. "The pandemic has cost us so much in the past two years. And now it's starting all over again." The seller isn't interested in the Winter Olympics, but rather the Covid outbreak just before the games start in mid-January, which has hurt her business. There were only five cases in the immediate vicinity: in a milk tea shop. Thousands of people had to be quarantined for two weeks. The streets and restaurants were emptier than usual.

A café owner who wishes to remain anonymous is also concerned. He says he sold up to 50 percent less in January than before. "It is unfair that the government is going through the measures under such pressure," he says. Life must go on. "In the end, rules have no life. But people have life," says the man.

Fear of introducing infections

Other cities in China were also hit shortly before the start of the Winter Olympics. Important economic metropolises such as Tianjin and Xi'an were in lockdown in December and January. Production lines stood still. It was the largest corona outbreak in the People's Republic since spring 2020.

In the run-up to the games, the authorities were particularly nervous because they feared that infections could spread unchecked. There was a fear that infections would be brought in from abroad. "There are outbreaks in Beijing too. We don't need the Winter Olympics. I think safety should come first," said the Shanghai café owner.

Weakening economy fuels criticism

There was no sign of enthusiasm before or during the games in Shanghai. On the contrary. It seems like a change of mood. A paradigm shift. Many people are suddenly critical of the government in a country where there is no freedom of expression.

"This general dissatisfaction has to do with the slowdown in economic growth," explains a Chinese professor of psychology who, for security reasons, does not want to give his name and who now lives in the United States. "Since October, the economy has not been growing strongly. This has a direct impact on people's lives. From talking to friends, we noticed that there are signs in big cities like Shanghai, Hangzhou and Shenzhen that things are no longer doing so well economically running."

Economically, China has so far weathered the pandemic better than other economies. According to official statistics, the gross domestic product in 2021 increased by around eight percent compared to the previous year. In the final quarter, however, growth was no longer as strong at four percent – also because of the corona outbreaks and the lockdowns.

Olympic organizers see economic success

When asked by ARD, China's organizing committee in Beijing describes the Olympic Winter Games as an economic success. A written statement reads:

The Olympic Games are generally considered negative business. According to an analysis by the "Financial Times", China has spent the equivalent of at least seven billion euros to host the games and build new venues. That's almost double the original budget that was envisaged. The artificial snow alone for the previously undeveloped ski area in Yanqing is said to have cost the equivalent of more than a billion euros. Many investments do not even appear in the budget for the games.

Headwind for Olympic sponsors

Human rights groups have criticized international Olympic sponsors for financially supporting the games. In addition to the German DAX company Allianz, this also includes the car company Toyota, the credit card provider Visa and the beverage company Coca-Cola.

Only time will tell how good or bad the Olympic Winter Games will be for the sponsors in terms of reputation, says business ethicist Alicia Hennig from the International University Institute (IHI) Zittau. "The fact is, however, that the sponsors have not made themselves popular with their sponsorship, and I think that was very visible in many countries outside of China – because they are giving legitimacy to an inhuman regime in which they are entering into such far-reaching cooperation," says Hennig.

According to Hennig, the Chinese government does not deserve a medal from the point of view of economic ethics. Because the Chinese government "is still the cause of systematic human rights violations, and these then have an effect, for example, in the area of production, in the form of forced labor, for example. In addition, various Chinese companies, for example, are involved in these systematic human rights violations and are therefore also accomplices ."

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