dachang, china -- The phones are ringing off the hook at Yang Yuming's office these days. The general manager of Tianpu Meat Processing Co. says he can barely keep up with rising orders from Holiday Inn and other hotels and restaurants in Beijing wanting more ribeye, tenderloin and strip loin steaks.
Orders are up 30% this year, and with more Western and wealthy Chinese visitors expected for the 2008 Summer Olympics, he says, demand for beef is going to grow even faster. But Yang isn't rolling in dough or looking forward to the new year.
Meat prices have jumped nearly 40% in recent months, and the rapid increase has left Yang and dozens of other beef and mutton processors struggling to make ends meet. When asked about his company's profit, Yang drew a big circle with his finger.
His customers won't allow him to pass on the full increase, he says, so with every extra order, Yang struggles to break even. "No, I'm not celebrating the Olympics," the 42-year-old said while wearing a thick parka in his cold, bare office.
Surging inflation, and problems with product quality and China's breakneck economic growth, were dominant themes in China last year -- and they weigh heavily on the minds of policymakers, businesses and consumers as the nation heads into its long-awaited year of the Olympics. Last year also marked China's arrival on the international investing scene.
The August games are the first with China as host, and are being touted as a seminal moment for the rising Asian powerhouse. Undoubtedly, they will be a grand spectacle.
Economically, though, the Olympics will matter little outside Beijing, experts say. Though they will boost consumption a bit and give a lift to tourism, "the Olympics are likely to be irrelevant to the economy," said Andy Rothman, China strategist for brokerage firm CLSA in Shanghai.
Beijing says it is plowing $34 billion into building up for the Olympics -- five times what Sydney spent for the 2000 games -- but Rothman notes that is still just 2.4% of China's investments for land, plants and equipment in 2006.
Rothman and most other economists see China's gross domestic product growth slowing in 2008 from last year's torrid pace of about 11.5%. How much may depend on the extent of the U.S. and global economic retreat after the sub-prime mortgage meltdown and resulting credit crunch.
