Beijing says the cost of hosting the 2022 Winter Games is among the cheapest ever at $3.9 billion. But the real cost might be more than $38.5 billion, 10 times the reported amount.

  • According to its official reports, China is hosting the Winter Games at a budget-friendly cost of $3.9 billion.

  • Insider's investigation revealed that the total sum is in excess of $38.5 billion, 24 times the country's initial budget of $1.6 billion.

  • This includes construction costs and the hefty price tag of new infrastructure — like a $9.2 billion bullet train.

When Chinese leader Xi Jinping toured Beijing's Winter Games venues in November, he expressed modest ambitions for the Olympics — that they be "Green, safe, and simple." It was a pared-down vision, in stark contrast to the pomp and circumstance of the country's 2008 Summer Games and its $42 billion price tag.

According to official tallies, at least, Beijing appeared to keep with Xi's mission. With a price tag of $3.9 billion, the 2022 Beijing Olympics are, on paper, the least expensive Games in the last two decades. But questions have arisen as to whether China accurately reported how much it has spent to make the global athletic competition happen. Insider's investigation into the numbers revealed that the actual sum is in excess of $38.5 billion, 10 times the official budget.

China's lack of transparency might have given it bragging rights, with the state-linked media touting claims of the country's immense "strength" and ability to host a mega-sporting event at a fraction of the price of the Tokyo Summer Games and the Sochi Olympics. But this claim is inaccurate at best and a gross underestimation of just how much it takes for countries to host the Games.

"Coming out of China, it's all the more difficult to get any detailed or accurate information. I don't need to tell you that things are heavily centralized and controlled there. And so I have not, to this date, I haven't seen any estimates," sports economist Andrew Zimbalist told Insider.

China, he continued, isn't "talking about the transportation infrastructure. They're not talking about the sporting infrastructure. They're not talking about the cost of building the Olympic village. And so any so-called official numbers or budgetary figures that come out of any of these games is highly suspect," Zimbalist added.

The off-the-books costs of the Beijing Games

A train attendant poses beside an intelligent Fuxing bullet train decorated with a Winter Olympics-themed coating at Chongli Railway Station on January 6, 2022 in Zhangjiakou, Hebei Province of China.
The Fuxing bullet train can bring passengers from Beijing to Zhangjiakou in 50 minutes, a trip that would normally take three hours.Shi Jiamin/VCG via Getty Images

There are dozens of line items left off Beijing's official tally, Insider found.

For one, conspicuously absent from Beijing's current list of costs is the National Speed Skating Oval. Also known as the Ice Ribbon, it was completed in 2020 and estimated in 2017 to cost the government around $186.6 million to build. It also repurposed several venues constructed for the 2008 Games, including the Bird's Nest, Beijing's national stadium, and the Water Cube, the city's aquatics center. However, it's unclear how much China spent to refurbish the venues.

Many of China's biggest ticket items fall under the category of "capital improvements," which the International Olympics Committee classifies as separate from other types of Games expenses.

"The (budget) is dependent on what already exists and the long-term goals the hosts wish to achieve with the staging of the Games as sports venues do not serve only the four weeks of Olympic and Paralympic Games competition," an IOC representative told Insider. "They are meant to have both community and commercial use and benefit the hosts for many years afterward."

Many of China's capital improvements have centered on Yanqing and Zhangjiakou, two satellite locations for the Games.

China converted Yanqing, a district in northwest Beijing, into a glistening series of arenas with an alpine ski center and a separate Olympic Village to accommodate over 1,400 athletes and officials. A second Olympic Village in Beijing's city center designed to house around 2,300 athletes cost an estimated $3.16 billion, according to 2019 figures.

The country spent an estimated $442.9 million to construct bobsled, skeleton, luge, and alpine skiing venues in Yanqing. Separately, Xinhua reported, two dozen unnamed corporations donated an additional $514.1 million to Yanqing's development, though this amount was billed as cash investments to develop the district.

China poured another $5.18 billion into building 50 projects related to its Olympic venues in Zhangjiakou, a city of around 1.5 million that's known as "the Gateway to Beijing." One of those projects is the country's third Olympic village, which will house an additional 2,640 people. It also contains competition venues like the Genting Snow Park, the National Biathlon Center, the National Ski Jumping Center, and the National Cross-Country Center.

Building out Olympics satellite locations also requires a robust transportation infrastructure. So China spruced up Zhangjiakou's Ningyuan airport at the cost of $205.6 million and pumped $15.02 billion into building new highways to ensure connectivity between the satellite areas just in time for the Olympics.

Another $773.5 million is estimated to have gone into the Beijing Winter Olympics Subway Line, built specifically to cater to the Winter Games.

And the country spent another $9.2 billion on a driverless bullet train designed to ferry passengers between Zhangjiakou and Beijing within 50 minutes, down from an initial travel time of three hours.

A graphic showing a breakdown of the $38.5 billion that China is expected to have spent for the Beijing Games.
China appears to not have included several big-ticket items in its lists of costs for the Beijing Games — including a massive chunk of cash that was pumped into building venues and infrastructure for the Winter Olympics.Cheryl Teh

Zhou, the deputy minister of finance, told Xinhua News in 2015 that China would offset some of its infrastructure costs by converting the Olympic villages built in Beijing and Zhangjiakou into commercial housing after the Games. Additionally, the country plans to offset the price tag of many of the venues built for the Winter Olympics by repurposing them as "basic infrastructural amenities," per state-linked news outlet Renmin Daily.

The country also plans to use the bevy of new sporting venues to "vigorously" develop ice and snow sports across the region.

A 2019 memo from the General Office of the Central Committee of the Communist Party of China lamented China's "low level of competition, limited participation of the masses, and weak industrial foundation" when compared with "the world's ice and snow powers" and vowed to "vigorously popularize mass ice and snow sports."

China may also be writing off the expense of maintaining its COVID-19 bubble and neglecting to tabulate the hefty environmental and social costs of the Games

Beijing is ramping up COVID-19 testing in the capital, and anally swabbing small segments of its population in a bid to ring-fence as many Omicron cases as possible.Noel Celis / AFP via Getty Images

Zimbalist, the sports economist, told Insider that the severe environmental and social costs associated with hosting the games likely wouldn't be included in any official budget.

"The Northeast of China, Beijing and further North, as you approach the Gobi Desert, is an area that's very arid. They already have to move tremendous amounts of water from Southern China and pump it up to take care of the agricultural needs because the Northeast is a breadbasket for China," Zimbalist told Insider.

"They're going to be diverting water away from the agricultural uses in order to make the artificial snow. Those environmental costs are not going to be included. And the social costs, which will have to do with disruption and dislocation (of people), are not going to be included," Zimbalist added.

Maintaining a strict COVID-19 bubble for the Games also doesn't seem to have been factored into the Games' costs. China also hasn't revealed how much it spent on COVID-19 measures. To encourage social distancing and minimize contact, the Olympics will employ robots to serve food, disinfect floors and provide directions to visitors. It's also created a "closed-loop" bubble, in which athletes, officials, broadcasters, and journalists may move only within designated locales.

But organizing such widespread health initiatives requires large quantities of human and financial resources.

"With COVID-19, there will definitely be additional costs to contain the virus, like testing measures and quarantining. China will need manpower to control COVID-19, and I don't believe that they've included this in the costs," said Bryan Chiu, an associate professor of sports management at the Hong Kong Metropolitan University's Lee Shau Kee School of Business and Administration.

China says it's saved money by 'streamlining unnecessary events'

A representative from the International Olympic Committee's (IOC) told Insider that differentiations are made between the Games organization budget and any capital investment the host country may undertake.

The IOC went on to say that the Games' organizing budget, which includes competition organization, venue operations, workforce, technology, and transportation, is almost entirely privately-funded. It includes revenues from sponsors, ticket sales, merchandise, and hospitality, as well as a "significant financial contribution" from the IOC.

The IOC noted that according to the Beijing 2022 Organising Committee's latest financial projections, the Winter Games has a "balanced budget" that includes some $880 million in financial contributions from the IOC.

A representative for the Beijing Olympic Committee told Insider that the country's expenditure so far during the preparation process has been "roughly equivalent to the budget reports."

The committee did acknowledge that the COVID-19 pandemic had increased costs.

To offset this, "in accordance with our desire to host a 'simple, safe and exciting' competition, some costs were saved by streamlining unnecessary events," the representative added, highlighting the shortened Olympic torch relay procession in the Chinese capital.

The committee rep also said China would release an official account of Olympics expenses six months after the end of the Games.

The low final tally promotes the narrative of a 'financially austere' Olympics

Image shows an installation of the emblem of Beijing 2022 Winter Olympic Games with the Olympic rings on Yongdingmen square on January 16, 2022 in Beijing, China

The Winter Games' official price tag of $3.9 billion is a far cry from the country's 2008 Summer Games, which came in at around $42 billion.

Government officials told Sohu News that event preparations, including the cost of operating the stadiums, healthcare systems, and transportation for the athletes and staff would come to $1.5 billion. Another $1.5 billion, they told Sohu, would go to constructing and furnishing competition venues and non-competition venues, leaving around $900 million unaccounted for.

Chinese official Zhou Xing, deputy minister of finance and market development for the Games and a Beijing Winter Olympics bid committee member, told state-owned media Xinhua News that the Olympics planning committee was looking to save as much money as possible.

"We have money and strength, but we will spend the money in a financially austere manner, and still hold a high-quality Winter Olympics," said Zhou.

Xu Jicheng, director of information and planning at the Beijing Winter Olympics Bid Committee, echoed her sentiments. "We've hosted one Olympic Games, so we know exactly where to save money," he told Xinhua.

China ultimately may be touting the Games' lowballed — and inaccurate — final cost as a way to boast superiority over the recent Tokyo Games. The final spending for the Tokyo Games came in at $12.6 billion, according to Japan's official audit, though an Oxford study on Japan's Olympic spending indicates it may be far closer to $15.84 billion.

"These Olympic Games are happening only six months after the Tokyo Olympic Games. Now it will be easier for people to compare these two games, and of course, China will want to be better than Japan. It's a good way to prove that China is an advanced country, and to say — we are green, and we are technologically advanced," said Chiu, the sports management professor.

Chiu added that, as in 2008, the 2022 Winter Games could be a rallying call for Chinese nationalism and a way to hype up the Chinese populace using a mega-sporting event.

"This time, the symbolic meaning is more important to China. They want to show the whole world we are capable of doing something and showing our national power to the whole world," Chiu said. "They are very proud of being Chinese and (demonstrating) that they are capable of hosting such huge events."

Read the original article on Insider