Guest Article by Trey Rainey
The 2022 Winter Olympics are fast approaching. The three main venue locations: Beijing, Yanqing, and Chongli, are all in the middle of massive construction projects. Having lived and worked next to the Olympic venues in Chongli for over a year, I saw massive changes and herculean efforts to ensure that everything is ready for the games.
Chongli (崇礼) was formerly a mining district and is roughly one hour Northeast of Zhangjiakou in Hebei Province. After all the mining companies left town, Chongli reverted to agriculture. Farming was, up until very recently, the main source of income for both those in town and those in the surrounding countryside. As a result, most Chinese people had never heard of Chongli.
Why Chongli Was Selected as a Host Location
Many wondered why Chongli was selected as one of the three Olympic venue sites, especially since it rarely snows there. If one digs a little deeper, Chongli has a lot of attributes that make it a great host city. First and foremost, it is a mountainous region. It is also roughly a mile above sea-level and in the latitudinal sweet spot for ski resorts. That means that the ski slopes are open for roughly seven months each year. Second is its proximity to Beijing. As the crow flies, Chongli is less than 100 miles from Beijing; with Yanqing roughly halfway between the two locations. Third is that multiple ski resorts had successfully been in operation in Chongli for years prior to the announcement; proof that it was possible to be done.
Challenges of Chongli Being a Host Location
However, Chongli presents certain challenges that many other ski-towns never had to face. The first major problem to overcome was that there is hardly ever any sort of precipitation. Next was the complete lack of infrastructure. Although Chongli is relatively close to Beijing, it was not very accessible. Previously, access to Chongli was very indirect, taking over four hours. The town was not suitable for multiple venues, so all the Olympic venues in Chongli are roughly 25 kilometers Southeast of downtown. The only way there was by a winding two-lane road. However, many of these venues did not exist five years ago. This would not be acceptable for the Olympics and huge investments in infrastructure would need to be made.
Almost overnight, the town transformed from being a quiet, agrarian society, to a bustling town of constant growth and construction. Workers from all over the country and the globe flocked to the area to set about building Olympic venues out of nothing. They quickly tackled the water issue by building a pipeline from Beijing to reservoirs to naturally collect water. All the snow at every resort is artificially made. To make Chongli more accessible, they began to simultaneously build a more direct highway and a high-speed rail. The new highway cuts the commute from Beijing in half and the high speed rail connects Zhangjiakou, Chongli, Yanqing, the Badaling section of the Great Wall, to Beijing proper. The train originates from Beijing North Railway station and arrives at Taizicheng station right outside of the Olympic venues in just under an hour. Due to multiple massive construction projects, the road needed to be widened from two lanes to four. A steady train of dump trucks and construction equipment constantly flow up and down the mountain. Construction teams from all over the country are literally working around the clock to ensure everything is done in time for the Olympic games.
What This Means for Business Opportunities
With the huge influx of investment, manpower, and soon the insanity that comes with the Olympics, many are already trying to start businesses in Chongli. In a town that used to not be printed on maps, one can find high-end ski equipment shops, luxury goods, and Western Restaurants. Chongli has become a vacation destination for the wealthy of Beijing. In the summertime, many flock to Chongli for the mild temperatures and clean, outdoor experiences. The streets become flooded with high-end super cars and Beijing license plates.
Many see the astronomical growth of Chongli and want to invest. There are many opportunities to start businesses there or to buy property. Many newly built apartments in town and condos at the resort are for sale right now; many at reasonable prices. Apartments in town tend to move quickly.
However, there are some big questions. Although Beijing has all but moved mountains to turn Chongli into an Olympic host site, many wonder how sustainable it is. The ski industry in China has been quite small; something only the wealthy could afford. Most people do not have the time nor the money to go on a ski weekend. The Chinese Government has taken measures to make winter sports popular in China. The ever growing middle-class is also starting to have more disposable income and free time as well. One could make an argument that those problems will not matter.
The biggest issue is that even with significant government investment, the ski resorts in the area are still losing money. Every year, revenue increases significantly, but due to the cost of simultaneously building and running a resort, and the COVID-19 pandemic, the resorts in the area are having financial issues. Since ski resorts and winter sports are such new concepts in China, no one knows how long these resorts will last.
To any potential investors and entrepreneurs looking to do business in Chongli, I would highly recommend that you consider a few variables. Would your plan be short-term (i.e. for the Olympics or for a year or two afterwards) or long-term? How dependent would your model be on the ski industry? Would your plan work well in a rural, small-town setting? Would you want your offices/operation in Chongli or based in Beijing or Zhangjiakou?
Short-Term/Olympic Games-Based Business Ideas
Most short-term business ideas, at least in my opinion, would revolve around the ski industry. Selling items either at or directly to the ski resort could be present some opportunities. Between ski equipment, protective gear (which often included giant stuffed animals that you can strap to your knees, elbows, and rear ends), clothing, or food, there are plenty of short-term options. Personally, I would consider selling warm clothes, specifically gloves and face protection. Most people come to these resorts woefully underprepared for the elements. It can get as cold as -40 degrees before factoring in wind chill; and it is often very windy. It is quite common to see people with small amounts of frostbite because they are unprepared.
Another option would be to open a rental place in town. It is becoming increasingly popular to rent gear from shops in town because they tend to be cheaper and newer. However, rentals from these shops and the resorts can be quite spotty as little is done to maintain their gear. A shop that properly maintains its equipment and ensures it fits the renter properly could be quite competitive and make the ski slopes safer.
Long-Term Business Ideas
Regardless of the success or failure of the budding ski industry, Chongli could be perfect for long-term business opportunities. Two safe options could be manufacturing or a distribution center. Most of Chongli is undeveloped empty land, and land is quite cheap (especially after the Olympics ends). Chongli is an hour away from Zhangjiakou (which has an airport), and roughly two and a half hours away from Beijing making distribution relatively easy. The local population is also mostly laborers and would welcome good manufacturing jobs. Building a distribution center would also be a relatively safe investment. As it stands now, most shipments take a long time to reach Chongli because the closest distribution centers are not close at all. With the ever-expanding highway and road system in the area, building a Chongli distribution hub could be a sound business opportunity.
Food & beverage distributors can also find unique opportunities in Chongli. The craft beer scene in China has exploded within the last ten years, but it has been mostly contained to the big cities. However, with legislation pushing breweries further and further out of the city, starting a brewery in Chongli could be a lucrative opportunity. The craft beer scene is mostly untapped in Hebei, but with a population of over 75 million, it should be a viable market within the next five years. Multiple resorts have tried to tap into this market but were unwilling to take the necessary steps to be successful or to expand in the future. There are several brewers in the area who are looking for better opportunities and to build a successful brewery with beer sold nation-wide. I am quite close with several brewers throughout China and could help you get in contact with them.
Renewable energy and sustainability projects also have a large presence in the area. Wind turbines are almost always visible in Chongli. China has been heavily investing in renewable energy for the past few years. There could be plenty of opportunities in this field.
All these options rely upon taking advantage of low real estate prices, the expanding transportation network, and local labor. Finding the right opportunity to invest in renewable energy or sustainability projects could also prove lucrative. They all are relatively safe options as well with varying growth potential. However, they all have their own share of hurdles, up-front costs, and risks as well. Luckily, the local government has been making moves to foster growth and development. With the right connections and some negotiation, it could be a little easier than normal; especially once the Olympics are over and business starts stagnating.
Conclusion
Chongli is an interesting and exciting place to be with the Olympics fast approaching. It is an area of intense growth and the subject of incredible investments of time, money, and manpower. Changes happen almost too quickly to keep up with and have mostly improved the lives of many. In China, there is a growing sense of 中国梦, or the China dream. It is not all that dissimilar to the American Dream, but to many the China Dream is business opportunities and the chance to quickly profit. Right now, Chongli is the embodiment of the China Dream.
About the Author: Trey Rainey is an international consultant and most recently he was working as a manager in Chongli at one of the ski resorts and has experience working in government, film, and hospitality. Trey has spent nearly four years in China and studied China for over a decade. Trey has a B.A. in International Affairs and Mandarin, as well as an M.A. in Advanced Chinese Language and Culture; both from the Ohio State University.
LinkedIn: https://www.linkedin.com/in/kenneth-trey-rainey/
Availability: Trey is available for consulting or full-time opportunities
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