China Sees Sports as Growth Driver After Its Olympics Success
China Sees Sports as Growth Driver After Its Olympics Success
(Bloomberg) -- With China poised to top the Olympic gold medals table for the first time since 2008, it’s taking even bigger steps to make sports a driver of economic growth.
China’s success in Tokyo -- where it had won 34 gold medals as of Friday morning, compared with 30 for the U.S. -- is partly a reflection of a concerted effort over the years to boost spending on sports in the run-up to the 2022 Winter Olympics in Beijing.
Now authorities have an ambitious plan to make sports into a 5 trillion yuan ($773 billion) industry by 2025, a 70% increase from 2019 levels. That could make it a potential driver of the economy, a job creator and an attractive area for investment.
Shares of Chinese sneaker makers and other sports companies jumped this week after Beijing set specific goals, like having more than one-third of the population participate in regular exercises, and making sure every county and community has gym equipment.
Under the sports plan, more than 3 million people would be employed as fitness trainers to encourage public exercises. That would be more than the number of people that worked in China’s hotel and catering sector in 2019, according to Bloomberg calculations.
If Beijing’s goals are met, sports would account for 3.3% of gross domestic product by 2025 -- up from 2.5% in 2015, according to Bloomberg calculations using GDP estimates from the International Monetary Fund.
Though still at an early stage of development, the sports industry has grown into an “important support” to the Chinese economy, China International Capital Corp. analysts led by Tao Ye wrote in a report.
“We expect the sector to transform into a more diverse, healthy and sustainable model of development,” they said.
The government increased spending on sports significantly ahead of the Tokyo Olympics, spending almost 10 billion yuan in 2019, the General Administration of Sport said in its budget report for the year.
The organization, which oversees training for Olympic sports in China, reduced its administrative costs while boosting funding for sports competitions by 26%. Spending on overseas games increased by 53% in the year.
The spending paid off in Tokyo, with Chinese athletes excelling not only in events where they’ve traditionally had success -- such as diving, weightlifting and gymnastics -- but also in new ones like the men’s 100-meter sprint, triple jump and men’s 200-meter swimming medley.
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With assistance from Bloomberg