When Tokyo was awarded the Olympic Games in 1964, the city's growth rates skyrocketed.

A few years later, however, a "bubble" economy came forth in Japan and finally burst in 1989 - hitting the city hard and causing a depression that lasted nearly 15 years.

No one has denied the giant wealth that the sports gala contributed to the island economy, but the over-hyped event was also seen to have led Japan to fight the uphill battle that resulted from overheated investment, Huang said.

Following the Sydney Olympics in 2000, Australia met a similar scenario, suffering from an economic malaise, with considerable problems in its adverting and property industries.

During the year Australia hosted the Olympics, advertising and property industries in the country witnessed a flourishing growth, and most of the advertisements were sports industry-related.

However, once the Olympics were over and the focus of world attention shifted, advertisers were unwilling to pour in money, and many houses were left vacant due to lack of a long-term plan for dealing with this problem, Huang said.

"We should learn lessons from these cities," Huang said.

Wei Jizhong, a senior member of the Beijing Olympic Bid Committee, also sees possible impacts from hosting the Games.

"Though the Olympics will certainly bring good news, the Games may also result in the Olympic bubble, hurting the economy and the healthy development of the sports industry," said Wei, also the chairman of the China Sports Industry Co Ltd, a listed sports-related company.

"Chinese people have a traditional passion for the grandiose, which is hazardous," said Di Ruipeng, a professor with the School of Economics and Management at Tsinghua University.

Di warned the follow-up use of the stadiums and other facilities should be taken into consideration. Di also called on Beijing to link the needs of hosting the games with the long-term planning of the city when choosing the sites for Olympic stadiums.

"It is really too early to speculate on just how far-reaching the Olympics' financial ripple will prove to be," said Huang, accusing some real estate developers of raising housing prices.

After Beijing was elected the host city, some real estate developers claimed that high-end housing in Beijing could go up as high as 20,000 yuan (US$2,400) per square meter.

During the first three quarters of 2001, investment in real estate projects in Beijing rose by 55.5 per cent from a year earlier, and new commercial housing increased by 86.9 per cent.

The hike in the already expensive housing prices in the city shows signs of an Olympic "bubble," Huang warned.

However, it can be controlled if proper measures are carried out, he said.

"We have a six-year preparation period for the Games, so we should invest in the required construction step by step instead of pouring investment in the last two years, to prevent overheated investment," Huang suggested.

Meanwhile, more experts from various sectors should be introduced to supervise Olympic investment, he said.

Despite economic concerns, there is little doubt that hosting the Olympics will accelerate growth in the communications, transportation, construction, service, and environmental protection industries and help them meet international standards as soon as possible, Wei said.

In the meantime, investor enthusiasm towards China-related stocks, especially those geared to the Chinese consumer market, is expected to be bolstered, said Wei.

A recent market research conducted by the DBS Bank, a leading bank in Singapore, also predicted that China's 2008 Olympic Games will contribute 0.2 percentage points to the country's long-term average gross domestic product (GDP) from 2002 to 2007.

(Business Weekly July 30, 2002)