There is no question that large, global sporting events can help change the image of a city. Governments use the spectacles as a means to redevelop or invest further in a city’s infrastructure. South Africa proposed a nine billion rand — or about 1.7 billion USD — budget on city infrastructure projects for next year’s World Cup. According to the Beijing Organizing Committee, the 2008 Olympic Games saw about 60 billion USD invested in city-wide infrastructure projects, which included new stadium venues for the sporting events.

Last week, the article “Sloppy Services Bode Ill for Guangzhou’s Asian Games,” which appeared on the Global Times and was reported by China Sport’s Review’s David Yang, noted that Guangzhou would spend approximately 29 billion on infrastructure throughout the city, and an additional 900 million USD on stadium construction and renovations, in preparation for the athletic events in 2010.

China continues to show willingness to play host to several international sporting events, as well as increasingly popular national athletic endeavors. As mentioned, there are the 16th Annual Asian Games in Guangzhou. The 2009 East Asian Games are currently taking place in Hong Kong until Dec. 13.

Nanjing, which bid and was eventually eliminated for consideration as the host city for the 2012 Youth Winter Olympic Games, is currently in the bidding process for the 2014 Youth Summer Olympic Games. Even animatronics is getting into the mix, as 2010 will also see Harbin play host to the Robot Games, where androids designed from more than 100 universities worldwide will compete.

Apparent in the infrastructure bubble that takes place in cities around China that are vying for the chance to host a major sporting competition is that chinks are beginning to arise in just how productive and profitable a host city can be in the years after the athletics have moved on. Just recently, China Daily reported the city of Harbin gave up on its plan to bid for the 2018 Winter Olympics, saying that a push by the People’s Republic to host a winter Olympic Games event was “premature.”

Beijing’s crown jewel of sporting events, the 2008 Olympic Games, cost a reported 400 billion RMB, with 12 venues constructed for the two-week event. A 2006 New York Times article titled “The China Syndrome” noted the original budget for the National Stadium was about 500 billion USD, yet the Bird’s Nest currently sits toiling just north of the city center.

Long-term use of Olympic venues has always been the Achilles heel of hosting the event, but in China’s case, where the country is taking on larger sporting events, when infrastructure includes new stadiums and sporting venues, what is happening to these places after the games have finished?

In January, USA Today reported the Bird’s Nest is still searching for a permanent tenant, has yet to hold a major sporting event, and there are doubts the stadium will ever recoup the 450 million USD the government spent to construct the architectural wonder.

According to an Oct. 2005 Reuters article, the budget for the 2005 China National Games held in Jiangsu province was roughly one-third of the 2008 Olympic Games spending, and the Nanjing Olympic Sports Stadium —constructed in 2002 and an integral part of the 2005 China National Games — according to the stadium’s official Web site is now used almost exclusively for local events.

chinaSMACK, which translates “hot topics” on Chinese Internet forums and Chinese news reports, reported that in addition to the myriad of scandals at the 11th National Games held in Shandong during the month of October, the total cost and construction for the event totaled 200 billion RMB, including the Jinan Olympic Sports Center, a 60,000-seat stadium that was the centerpiece of the National Games.

China Daily reported in 2008 that Harbin needed three more stadiums built — at a price tag of 370 million USD — for the 24 Winter Universiade, which featured 4,000 athletes from 50 countries. And the East Asia Games, according to the secretary of home affairs’ home page, saw renovations on the three stadiums in Hong Kong, costing about 240 million USD.

The question surrounding all these monumental athletic venues is who plays in them going forward? The China Basketball Association, the country’s most visible sport, lost 17 million USD overall during the last season, according to an Economist Intelligence Report released in October. The People’s Republic currently has no homegrown athletic teams in any sport that can fill stadiums to capacity on a weekly basis.

Both the National Basketball Association, Premier League and the National Football League have made attempts to bring games to China, but the results have been marginal: a few preseason NBA and Major League Baseball games, an outright rejection to ship Premier League games outside of Europe, and two cancellations by the NFL.

China’s sports powerhouse ambitions, while praiseworthy on the field, have yielded few positive results for long-term sporting events. Yes, major international competitions take time and planning, but China has the infrastructure in place to do more with its sporting venues,  and tying its infrastructure plans to major sporting events should draw continued usage for years after.

— Zachary Franklin

“The economic crisis has indeed affected the sport and we felt there’s a need to adjust the prices,” Jiang Lan(姜澜), general manager of the Juss Event Co Ltd, the organizer, told Qianjiang Evening News(钱江晚报), a Zhejiang-based paper, “Another reason is to help recruit more Chinese F1 fans.”

“As long as there is China, we will be here,” said Bernie Ecclestone, the CEO of Formula One Management and Formula One Administration in a recent interview, remaining positive for the future of the game in Shanghai. “It is good for a country to have the exposure.”

Ecclestone is keen to pin the future of F1 to Asia, with South Korea GP confirmed next year and India in 2011. The Formula One first entered into the continent in 1976 in Japan. Malaysia signed their deal in 1999 while China and Bahrain joined the family in 2004. Singapore came on board in 2008 and Abu Dhabi is to debut this November.

Shanghai’s contract with F1 will end in 2010 and the municipal government has been reportedly doing the assessment whether to extend the deal. The decision will be made by the end of this year.

Links and sources:

• Times: Sebastian Vettel wins Chinese Grand Prix
• Sky Sports: Bernie says China GP will stay
• Dushi Kuaibao:  700 RMB for 3-day tickets in Shanghai GP (in Chinese via Sina)

Previously:

• Report Lost In Translation, Shanghai GP Likely to Stay
• China May Drop F1 Race in Shanghai As Its Economy Slows

photo: kenworker

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Qiu Weichang (邱伟昌), deputy director of the Shanghai Administration of Sports, is reported to have said that:

“We’re doing the assessment. By next year we should be able to give you an answer. Of course we would like at least to break even. But there are two factors – one is the assessment; the other part is the win-win situation that we can create.”

“I’ve spoken to Mr Qiu and he never said the Grand Prix was going to leave China,” Leon clarified in a telephone interview with Reuters. Leon continued by saying, “I think for sure there will be more events coming to Shanghai, the only thing we don’t know is when and how.”

It’s interesting to see how Juss reacted to this case and, we sincerely hope they can keep the F1 in China’s economic capital and get more events in the future.

Sources and Reads:

• Reuters: Motor racing-Chinese GP likely to stay after 2010 – organisers
• The Gazette: How to replace the Grand Prix? Here’s some ideas

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Chinese Grand Prix, hosted at the $450m Shanghai International Circuit since 2004, may see its end in 2010 when the contract with F1 expires.

“We’re doing the assessment. By next year we should be able to give you an answer,” Qiu Weichang, deputy director of the Shanghai Administration of Sports, told AFP on Thursday when asked about the future of the racing event. Early this month, Shanghai Grand Prix was announced by F1 to be rescheduled to play in April next year, a move, according to Chinese media, is to avoid clash with the ATP Masters Series next October.

Shanghai Grand Prix received 130,000 visitors this year, which is only half the number of its first year in 2004. According to Chongqing Evening News (CEN, 重庆晚报), the circuit needs to make RMB 625 million only to break even of its costs, which includes first phrase development the circuit, annual hosting fee to F1 and TV broadcast rights purchase. Shanghai Grand Prix generated RMB 300 million in 2004 and 216 million in 2005 in ticket sales. Its best year was 2006, making about RMB 400 million as the circuit hosted the farewell match of Michael Schumacher, then it plunged again to about RMB 200 millon last year. The CEN reported that the circuit at least makes a loss of RMB 200 million each year. “Of course we would like at least to break even. But there are two factors – one is the assessment; the other part is the win-win situation that we can create,” Qiu noted. By assessment, Qiu was obviously referring to a global profile and new opportunities the event can bring. But with the World Expo 2010 to be held in the city, will Shanghai still need F1 to do the branding?

Though China still remains a fast-growing economy when most of other countries suffer this winter, statistics suggest that the pace of the middle kingdom slowed. In order to boost its economy and consumption, Chinese government recently decided to throw a stimulus package of RMB 4 trillion (roughly $600 billion USD). “The stimulus plan is mainly about infrastructure development projects such as railways and airports, and it seems that it has nothing to do with raising people’s salaries,” said Mao Yushi, chairman of the Beijing-based Unirule Institute of Economics. “Millions of Chinese could lose their jobs next year. Salaries will shrink and people will less likely to buy.” So consumer confidence will not soon be recovered. This is, without doubt, gloomy news for most business owners in the country, and the racing event now looks like more of a drag to Shanghai’s economy.

Sources:

• AFP: Shanghai may axe F1 Grand Prix
• The Economist: China’s stimulus package

Photo: Bert van Dijk

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