April 09, 2010 10:26
The 2010 Shanghai Expo which opens May 1 is expected to generate greater economic effects for China than the 2008 Beijing Olympic Games did, analysts predict.
Korea's IBK Securities said Thursday that the Shanghai Expo's economic effects will be far bigger than those of the Beijing Olympics given the Expo's longer duration and other factors, potentially boosting China's GDP by as much as one percentage point.
Some 300 billion yuan (W50 trillion, US$1=W1,124) has been invested in construction of infrastructure and exhibition halls for the Expo, similar in scale to the 309 billion yuan spent preparing for the Olympics. However, the Expo will run for six months, more than ten times longer than the 17-day Olympics.
Revenues in the retail, hospitality, aviation and tourism industries are expected to surge with a massive influx of domestic and foreign tourists during the half-year event. The Expo's organizing committee anticipates up to 100 million tourists from 200 countries.
IBK Securities said that if foreign tourists spend an average of 3,000 yuan per person and domestic tourists 1,000 yuan, the Expo will boost consumption by 40 billion yuan, which is equal to 2.7 percent of Shanghai's GDP and 0.1 or 0.2 percent of China's GDP. If the infrastructure investment is counted, the nation's GDP may grow a total of one percentage point thanks to the event.
The Expo itself will also create more revenue than the Beijing Olympics did two years ago, through various forms of income such as ticket sales, sponsorship deals and exhibition booth rentals. Beijing's direct earnings from the Olympic games were mainly limited to ticket sales for the event.
"The 1933 Chicago Expo attracted 23 million visitors and generated 100,000 jobs. It also sparked a craze for cars, promoting the rapid development of the U.S. auto industry," an analyst at Korea Investment and Securities pointed out. "China will see positive growth in the commercial real estate and culture industries after the Shanghai Expo ends."
Sun Seong-in, a researcher at IBK Securities, said, "Consumption in China’s coastal areas will increase greatly through the Shanghai Expo, offering good business opportunities to Korean exporters."
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