MarketWatch reports that China’s industrial growth in July hit its weakest point in the past 18 months, falling to 14.7%, compared to 16% in June. The obvious reason for the slowdown is the Olympics, which has–in an effort to beautify Beijing and divert resources to the games–put large curbs on factory output in the Beijing metropolitan area.

China is obviously changing–the Olympics are not only the country’s modern coming-of-age party but also an apparent landmark in a shift from industry and manufacturing to an economy based more on “affluent” economic sources such as services, entertainment, and investment. The sign that the government, which has long been reluctant (and even defiant, internationally speaking) to do anything that might curb it’s manufacturing dominance, would choose to do so for the Olympics is a sign of this shift.

This change of economy, of course, is necessary if China is to continue developing. But what are the greater consequences of Beijing’s choice to forcibly reign in industry for other goals? The businesses affected by the industrial curbs in the capital, most of which are happy to oblige out of national pride (and the rest of whom are smart enough to know not to make a fuss), may be less supine if it turns out that the effect of the Olympics isn’t just to change the world’s view of China, but also China’s view of itself.

As Dongcha has mused before, who isn’t to say that, seeing the Olympics bring cleaner air and less traffic to the city, these won’t become amenities that Beijingers ask for on an ongoing basis, not just when white dignitaries are in town? Even without grassroots action, it seems plausible that, since curbs on industry around Beijing are already in place, the government keep them indefinitely–using the Olympic momentum to push the city in a new economic direction? This would, after all, be an easy way to further develop China’s capital city into an international center.

Of course, this change would be positive for many, but not the manufacturers. Groups of people and businesses getting left behind and becoming obsolete is inevitable in any major economic shift, but seems somehow easier when that shift happens naturally, without the hand of the government pushing it on. In those cases, the (typically) slow pace of free market change gives more people more time to adapt to the new economy, and adjust their lives to get by in it. Also, it makes it harder for the people who lose on the change to find someone to blame. If Beijing, then, does what seems sensible and rides the Olympic economic and social inertia into a more modern economy, they also risk isolating a large segment of people that will see themselves as being betrayed for doing their patriotic duty–first they became manufacturers to make China great, then they curbed their businesses to show the world how great China had become, and at last they found that the government had moved on to other things, without them.

Can they see what the future holds?