Foreign Companies Face Hurdles Vying For Beijing Contracts

Foreign Companies At Disadvantage For ‘08 Beijing Olympic Contracts

While Beijing expects to spend almost $40B on stadiums and infrastructure by the ’08 Olympics, non-Chinese companies “face hurdles,” because “many Olympic-related projects such as sports stadiums are being built by private and state-owned Chinese companies, making the bidding process nearly as competitive as the games themselves,” according to Kranhold & Fong of the WALL STREET JOURNAL. Foreign business leaders said that learning about contract opportunities “is often difficult” because they are “often advertised on obscure Web sites or in newspapers, and companies are given short notice.” The “Olympic buildup has been dogged by allegations of corruption,” and in June, Beijing Vice Mayor Liu Zhihua, who oversaw Olympic construction, was ousted for “corruption and dissoluteness.” Former GE Senior Manager Li Jianbo, the head of the American Chamber of Commerce committee on the Olympics, said last year that Chinese Authorities were “unable to ensure that the bidding process is fair.” But GE President of Olympic Sponsorship Peter Foss said that Li’s comments “didn’t represent the companies views.” Foss: “I feel pretty good about the way we’re treated.” He added Olympic organizers are making a “strong and sincere effort” to conduct fair bidding. Kranhold & Fong note GE is targeting about $1B in Olympics-related contracts and “says it has already won more than $150[M] in contracts for projects.” The company reported $5B in revenue in China last year and “hopes to raise that” to $10B by 2010. GE is an Olympic sponsor in several categories, including security systems and lighting, but it must “bid against other companies that aren’t necessarily sponsors to supply permanent lighting and security systems to the stadiums” (WSJ, 10/16).