The Beijing Olympics: Are You Ready to Go the Extra Mile?

By William R. Dodson

 

14 February 2003

American companies are lining up with the rest of the world to run one of the greatest business marathons in ever: the 2008 Beijing Olympics. However, many companies are finding it’s still early days for gaining contracts in what will be China’s first occasion as host of the esteemed sporting event. The Olympic Committee is still selecting designs for sporting sites, and the government is still organizing the departments that will manage the deals and oversee the projects.

 

“The joke is that China will be finished with its Olympics facilities for the 2008 events before Greece [for its 2004 Olympics],” said David Snodgrass, Information Specialist at the U.S. Commercial Service, Beijing. Snodgrass spoke 5 February 2003 at a luncheon near Chicago, USA, on “Prospects for U.S. Exporters,” sponsored by the U.S. Export Assistance Center Chicago, the Illinois District Export Council, and the International Trade Association of Greater Chicago

 

The Beijing Olympic Organizing Committee for the Games (BOCOG) identified three major stages in the development of the 2008 Games:

• Preparatory Stage – December 2001 to June 2003

• Development Stage – July 2003 – June 2006

• Pre-games Operational Stage – July 2006 – July 2008

 

The major organizing bodies for the Olympics are BOCOG; the Beijing Development Planning Commission (BDPC), which manages the tenders; and the Beijing Municipal Planning Commission, which manages all building projects and is staffed by Beijing officials.

 

Venue construction for the Games will require 37 stadiums and gyms, 32 of which are in Beijing and five outside the capital, in Shanghai, Shenyang, Qinhuangda, Lianjin and Qingdao. Twenty-two of the venues will be brand new, with the remaining 15 being renovations.

 

The Olympic Green will include:

• A National Stadium

• A National Indoor Stadium

• A National Swimming Center

• The Olympic Village

• Meeting and Convention Center

• Commerce-affiliated facilities

 

An Ownership Tender is an expression of interest in owning a part of the Olympics franchise. Owners are responsible for the design, finance, construction, operations and maintenance of venues. Financing for projects will come through the Beijing Municipal Government, to minimize the complications of acquiring financing in China. The owner, however, is responsible for the work and behavior of project subcontractors.

 

The Theme of the Olympics is “Green Olympics, High-tech Olympics, People’s Olympics” Snodgrass identified the objectives of the Games as being 1) the best in history; 2) promoting Beijing’s and all of China’s development; 3) creating a new image for China; and 4) improving the development of Chinese sports.

 

Some of the challenges Beijing has in hosting a “green” Olympics include: severe air pollution; a shortage of water resources; and de-forestation. The Beijing Municipal Government plans to increase green coverage to 50%, to control local dust storms, and to increase the recycling rate of urban waste water to 50%.

 

Beijing also has transportation issues to overcome that include congestion and a public transit system that does not meet current demands. The Municipal Government is adding almost 150km of new rail to its urban rail system. It is also building additional road rings around the city to relieve the pressure of commuting. It is expanding the current municipal airport and has plans to add another airport. And the city will expand bus routes.

 

The Olympics, though, is just one part of an evolving Chinese society, Snodgrass was quick to point out. China has solid underlying economic growth encouraged by the country’s accession to the WTO. Chinese consumers are growing in sophistication, and local business is growing in savvy.

 

Snodgrass offered tips to American companies interested in pursuing opportunities in the 2008 Olympics:

Act Now – do your research and consult relevant contacts in Beijing;

Monitor Chinese media for project announcement, though many bid opportunities may be in Chinese;

1. Adhere to bidding rules of the tendering agency;

2. Find local partners when necessary

3. Have clear contract terms

4. Know your partner – do your due diligence

5. Never pay bribes

6. Be WTO compliant

7. Search for problems before they materialize;

8. Mind the Store – give constant attention to your China business

9. Have an Exit Strategy

 

Snodgrass outlined the recent history of the Beijing Olympics:

• July 2001 – Beijing wins the award to host the Olympics in 2008

• December 2001 – BOCOG is established

• March 2002 – BOCOG releases its action plan to the public

• April 2002 – The Olympic Green and Wukesong are identified as sites for the Games

• August 2002 – Sasaki wins the Design Competition for the Olympic Green, the main venue for the Games; and for the Wukesong Cultural Sports Center, where baseball, basketball and softball games will be played

• October 2002 – Beijing Olympics Design Competition opens

• August 2002 – December 2002 – BOCOG releases a detailed action plan

• October 2002 – Ownership Tenders Launched

• November 2002 – National Stadium Design Competition Opens

• Jan 2003 – Swimming Stadium Design Competition Opens

 

William R. Dodson is Managing Director of Silk Road Advisors, L.L.C., a market research and business development consultancy that advises companies on how to enter and succeed in international markets.  He is the contributing editor on international business to the American Management Association’s (AMA) MWorld Journal of Management, and writes the weekly column “The Cultured Business”, found at www.silkrc.com and at the Global Perspectives section of the AMA’s member website. He can be reached at sradvisors@gmail.com or +1 (847)722-7817.