But with the Olympic Games as a catalyst, government authorities undertook a vast makeover of the city. Since its selection in 2001 as the host city, it has poured $40 billion into infrastructure projects and Olympics venues while encouraging the development of glittering office, hotel and retail centers. Entire neighbourhoods are being renovated. In 2007, four new shopping centers added nearly 1.2 million square feet of retail space, office space expanded by more than 14 million square feet, and 2,500 new hotel rooms came onto the market, according to Jones Lang LaSalle, a real estate services and money management company.

And that was just last year. In 2008, an additional 11 shopping centers totalling more than 11 million square feet are scheduled to open, along with 15 million square feet of office space and more than 11,000 hotel rooms, Jones Lang LaSalle said. With the new supply of high-quality real estate, more American companies have been heading into Beijing, seeking to expand their presence in one of the world’s fastest-growing markets. A less-stringent regulatory environment for business is also helping to clear the path; there are fewer ownership restrictions, for example, for foreign businesses in certain industries. “The city is expanding at such a pace, it’s creating new opportunities every day,” said Edwin Fuller, the president and managing director of international lodging for Marriott International, whose hotel brands include JW Marriott Hotels & Resorts, Ritz-Carlton and Renaissance Hotels.

The appeal, of course, is easy to see: China’s economy has been growing by double-digits annually, and its 1.3 billion or so citizens are becoming more affluent. Yet few Chinese brands compete in the luxury categories. “The consumer market is a blank canvas in China, to a certain degree,” said Benjamin Christensen, the research manager of Jones Lang LaSalle Beijing. It was only in 2001 that the first modern shopping mall opened in Beijing. But the concept has caught on with consumers and retailers alike. The advent of a global event like the Olympics, expected to draw some two million foreign and domestic visitors, has been a strong springboard.

Still, some people wonder what will happen when the athletes and the spectators go home, and Beijing is left to absorb an enormous increase in hotel rooms, shops and office space, some in unproven neighbourhoods. Many Olympic host cities, like Montreal in 1976 and Sydney, Australia, in 2000, experienced economic slumps after the Games as they struggled to recoup their costly investments.

In recent months, some new retail centers have had trouble lining up tenants, according to leasing agents. Similarly, hotel occupancy rates in Beijing are likely to drop, at least temporarily, after the Games, said Andreas Flaig, an executive vice president at Jones Lang LaSalle Hotels in China. But hotels may partially offset that with higher prices, he said, noting that average room rates for luxury hotels in Beijing nearly doubled from 1999 to 2007, to roughly $200. These hotels “are built for the long term, not for a 16-day event in August,” Flaig said.

Indeed, few companies coming into Beijing seem worried. For one thing, hotels groups like Marriott International tend to operate hotels for local business people who develop the properties, so they are more insulated from real estate costs and risks. Similarly, most retail outlets have a local partner or franchisee, although direct investment has been growing.

Moreover, China’s long-term growth prospects and Beijing’s healthy mix of tourists and business travellers bode well for the long term. Past Olympic host cities have largely been in developed countries. Beijing, by contrast, is experiencing breathtaking growth, and the investments made for the Olympics, largely centered on improving transportation and infrastructure, will only help its future growth, according to Michael Thompson, the president of Cushman & Wakefield’s Asia unit.