BEIJING (Reuters) - Zhou Zhilian is one of thousands of entrepreneurs for whom the Olympic Games next month represent more a missed opportunity than a chance to cash in on the influx of visitors expected to pour into Beijing.
The market in which Zhou runs an undergarment shop will soon be closed down for a month due to authorities’ worries that visitors might be able to find a scattering of fake name-brand goods among its predominantly cheap yet bona fide clothes.
That will force her to return to her native Zhejiang province until at least late August, with no income during that time and no guarantee that the business she has worked hard to build up will survive once she is able to reopen it.
“Who knows what will happen?” Zhou remarked between customers, trying to make as many sales as she can before she’s shut down.
“There are other shops, and people will go there in the meantime. It’ll be really difficult to get them to come back here.”
Zhou’s experience is being repeated in varying ways and degrees by small business owners across Beijing and beyond, as they are impacted by the government’s relentless drive to do anything it takes to ensure that the Games go off without a hitch.
In contrast with the firms that have gotten a piece of the $35-40 billion spent on improving infrastructure or the millions of dollars that visitors are expected to spend, many small businesses are finding themselves caught up in a web of often invasive measures.
Use of private cars will be restricted from later this month, and security checkpoints for vehicles arriving from outside the city are leading to long lines of trucks and cars waiting to get in.
The government is forcing hundreds of steel mills and other polluting factories in neighboring provinces to shut down or cut production as part of its bid for cleaner air, and many construction projects will be halted during the Games to cut down on dust.
LITTLE MACRO IMPACT
Economists say the temporary restrictions on construction and production are unlikely to have much of an impact on national economic growth, given that Beijing accounts for less than 4 percent of the overall economy.
“And spending by tourists, athletes, officials and media will mitigate much of the impact of industrial closures on the local economy,” Andy Rothman, strategist with brokerage CLSA in Shanghai, said in a research note.
But that is little consolation to small businesses that are seeing their bottom lines hit, without the bargaining power that bigger firms have to seek sweeteners for their sacrifice.
A number of restaurants and bars near an Olympic venue in central Beijing have reportedly been told to shut their doors during the Games out of security concerns, forcing some of them to cancel lucrative contracts to host events for major companies.
Xu Yongji runs the Neweast School, a private institute in Beijing that trains students from around the country in the art of Chinese cuisine.
While the Olympics have increased demand for graduates, the school currently has around 300 fewer students than normal because of restrictions on non-Beijing residents staying in the city, Xu said, seriously impacting tuition revenue.
“Most of the schools inside the third ring road have been told to have vacations,” Xu said, explaining that his school was at least able to remain open because it lies further outside the city centre.
“But many students have called us to ask if we are going to close down during the Games.”
Authorities have been stepping up checks on people without Beijing residency over the past months, many people affected say, in a sweep that has taken aim at clearing the city of potential protesters and others, including poor migrant workers, who might dent Beijing’s image as a modern metropolis.
TAKING BUSINESS ELSEWHERE
Paul French, chief China analyst at research firm Access Asia, points to potentially long-lasting problems for exporters around the country due to tighter visa controls for foreigners, as Beijing seeks to prevent potential troublemakers from entering the country.
A number of Western brands have been unable to get visas for their factory inspectors, meaning that they may not be able to award contracts to Chinese firms for Christmas orders if they cannot get the inspections done in time, French said.
“That cannot wait until September. Basically, everyone is scrambling around looking for capacity in Vietnam and Bangladesh,” he said.
“This is actually going to start hitting business pretty severely.”
To Zhao Jing, the Olympics have so far brought a double disappointment to her pocketbook.
Not only have universities near her clothing shop cut back on summer classes and encouraged students to go home, bringing the flow of customers to a trickle, but her investments are performing poorly.
China’s stock market dropped around 45 percent so far this year, cutting off a source of income that she and many other Chinese people had counted on through the Olympics.
“Other countries saw their stock markets go up before the Olympics -- they all made something out of it, so I don’t understand why we haven’t,” Zhao said.
She was not consoled by the fact that the market’s drop has been part of a global fall in equities in the wake of the U.S. subprime crisis.
“Most of us are just affected negatively by the Olympics. The businesses that can make money out of them are very few.”
(Additional reporting by Kitty Bu and Ben Blanchard; editing by Megan Goldin)