Asia Inc

BEIJING-based investor Sunny Fan believes in China’s future, but he’s worried that the nation may get a case of post-Olympic blues after the games end in August.

 

“There’s definitely a feeling that things will slow down after the Olympics and that property prices have peaked,” said Fan, who recently helped an overseas Chinese friend sell his Beijing apartment for 6.5 million yuan ($947,370) in June, more than double what his friend paid for back in 2003. “If you don’t want to see your property value fall, you better sell now.”

 

Fan, 44, who returned to China three years ago after spending more than a decade in Europe, said he sees dark clouds hanging over the economic horizon. Some Chinese officials also are worried, predicting a downturn. Economists also see the dark clouds, but most are a bit more sanguine and don’t believe China will catch a cold after the Olympics.

 

Investors can’t help but feel jittery. Authorities in Beijing invested $140 billion in infrastructure, including $40 billion on Olympic venues such as stadiums and swimming pools, for what may be China’s biggest ever coming-out party since the Communist Party began economic reforms in 1979. Real estate prices have doubled in most Chinese cities in the past three years, way out of reach of many working-class Chinese.

China — whose economy this year is due to surpass Germany’s to become the third largest — is using the games to speed up its capital’s transformation into one able to keep pace with the world’s fastest-growing major economy. China’s gross domestic product grew 10.7% in 2007, according to the National Bureau of Statistics. It has expanded at an average of 9.6% for the past quarter century, more than triple the pace in the US.

 

Chinese officials are worried too. They’re the ones who are raising interest rates and slowing mortgage lending growth to prevent overheating, especially in the property sector. In recent months, however, prices have fallen about 10%.

But Chris Tang, a Hong Kong-based hedge fund manager who is the chief investment officer of the $180-million Marco Polo Fund, said she’s not worried. “China’s stock markets have fallen by 40% this year and there’s already been a discounting of bad news,” Tang said, “And I’m longing China’s A-shares. I believe China will maintain its growth after the Olympics.”