The CCTV news announced on Sep. 16 that Hangzhou City successfully wins the right to host the 2022 Asian Games in the 34th congress of Olympic Council of Asia, becoming the third city to host the Asian Games in China after Beijing and Guangzhou.
Since this year, China has already won the rights to host the 2022 Olympic Winter Games and 2019 Men’s Basketball World Cup. And the president of Chinese Football Association, Cai Zhenhua, clearly stated in the assembly of Federation International Football Association held in May that China is desired to bid for the Football World Cup.
Along with a series of world games successfully held in China, the sports industrial development of China will also enter into a fast track. With the intensified measures to stabilize the growth in the second half year, the sports industry will also become a key point to promote China’s consumption. Last October, the State Council printed and issued Several Guidelines on Enhancing Sport Industrial Development and Consumption (the Several Guidelines), striving to achieve a total scale of over 5 trillion yuan for the sports industry in 2025 so as to enhance the sustainable economic and social development.
Asian Games to be held by Hangzhou, likely to release infrastructure investment of RMB100 bln yuan
The SSN data shows that the total investment in the 2010 Guangzhou Asian Games reached over 120 billion yuan. And the investment in 2022 Hangzhou Asian Games will exceed such figure.
Hangzhou successfully wins the right to host the Asian Games this time, with its infrastructure likely to obtain a long-term investment. Generally speaking, besides the construction and maintenance of the stadium and operation of the Asian Games, the capital investing the city to host the Asian Games will be mainly used for the city’s appearance and environment improvement, including railway construction, urban road, bridge, infrastructure, comprehensive environmental improvement, industrial sewage treatment.
The implementation on a series of engineering projects is likely to firstly benefit the listed infrastructural companies in Hangzhou and Zhejiang Province, with Changjiang & Jinggong Steel Building (Group) Co., Ltd. (600496.SH), Zhejiang Yasha Decoration Co., Ltd. (002375.SZ) and Hang Zhou Iron & Steel Co., Ltd. (600126.SH) worthy of the attention.
China likely to see in intensive period of large sport events, local sports industry to promote intensive policies issued
Along with a series of large sport events to be held in China, it is likely to see in an intensive period of large sport events within 10 years for China, generating a huge superimposed effect to revitalize China’s strategies on sports industry and consumption. The massive market space for the sports industry is likely to rapidly open and expand.
In addition, it is worthy of the attention that, along with the Several Guidelines in 2014, local governments have intensively issued local implementation guidelines since this year, stating to quicken the sports industrial development and consumption. The preliminary statistics show that 11 provinces and cities have issued local policies on sports development up to the end of August, accounting for 270 million yuan accumulatively for the sports industry.
Sports industry to boost consumption and facilitate stable growth
Seen from the policies by China’s various ministries and commissions recently, stabilizing the economic growth has become a priority for all the economic work in the second half of 2015. Besides increasing investment, boosting consumption will also be one of the measures to keep stable growth.
Therefore, the emerging consumption industry represented by sports industry will be a key industry China puts emphasis on. It is predicted that central and local governments will enhance support to push forward sports consumption market.
Dongxing Securities believe that the economic development and the change in population structure will lead the traditional basic consumption to develop into leisure service with eating, drinking, playing and entertaining. The budding sports market will see enormous potential. The dividends of competitive sport system resulted from separation of supervision and management and liberation of broadcasting right and the increasing demand for population health will bring a promising future to the sports industry development in next 10 years.
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