Despite being billed as the costliest Olympics ever, Beijing Olympics 2008 will not be the financial millstone around the neck of the Beijing municipal government in the years to come as made out to be, said Standard & Poor's Ratings Services in a report titled Beijing Olympics 2008--Too Fast, Too Large, Too Costly? Maybe Not.  

"Granted the cost of hosting the Games is huge, and its importance to China in terms of boosting its international standing is obvious; but it appears the Chinese authorities recognise that the Olympics is not an end in itself," said Standard & Poor's credit analyst Kim Eng Tan.  

Indeed, the authorities' careful planning of this massive sporting event suggests the benefits of hosting the Games will continue long after the closing ceremony. To begin with, many of the projects would have gone ahead whether the city had won the Olympics bid or not.

Beijing is a fast-growing metropolis and, until recently, its urban infrastructure also lagged significantly behind cities of comparable importance in the advanced economies. Hence, most of the capital projects involved improvements that were already in the city's development plan.  

The Beijing Olympics could be compared to the experience of Barcelona (AA+/Stable/--), where substantial infrastructure investment leading up to the 1992 Games helped boost its appeal for visitors and businesses alike. Notably, the positive economic impact helped lift the credit ratings on the city to its current level from the 'A-/Positive/--' rating that Standard & Poor's assigned in 1994.

With the advantage of a rich and long history, the boost to tourism for Beijing could be even greater.  

"Rather than a financial burden, hosting the Olympics could give a long-term boost to the city government's creditworthiness,"  Tan said.