August 06, 2008	Wednesday	Sha’aban 3, 1429

BEIJING, Aug 5: Beijing’s Olympics will be far and away the most expensive ever, but the bill of about $40 billion is mere pocket change for the roaring Chinese economy.

Unlike previous hosts that dug themselves deep holes of debt, from Montreal in 1976 to Athens four years ago, China’s capital can easily afford new stadiums, subways and roads.

And it may emerge an even stronger economy for all its lavish spending, analysts say.

“The majority of the money accounts for permanent infrastructure, stuff that we think, long term, will actually be productive for the Chinese economy,” said Andy Rothman, an economist with brokerage CLSA in Shanghai.

Of the $34 billion in spending the Chinese government has announced, less than a quarter will be devoted to purpose-built Olympic venues such as the National Stadium, better known as the Bird’s Nest, he said.

Still, the total cost of the Games, which analysts say should be around $40 billion because of losses from factory closures and unexpected costs, will dwarf the previous record of $15 billion paid by Athens in 2004.

But while Greek debt spiralled after the Games, China is close to a national budget surplus.

“The Chinese government is in very good financial shape,” Rothman said. “They can clearly afford to spend all this money on the Olympics and on other infrastructure.”—Reuters