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With the 2008 Olympic Games exactly 500 days away, China's preparations are going smoothly as planned, but challenges still remain over issues such as pollution and traffic congestion.

An Olympic countdown clock displays 500 days to the Olympic Games in Beijing March 26, 2007. A series of events are organized in China's major cities to mark the 500-day countdown to the Beijing Olympics.[Xinhua]

Despite a rising budget, mainly due to the increased expenditure on security and health, Beijing's financial goals are also being met with revenue from the Games expected to exceed original targets.

"We are absolutely confident that the Beijing Olympics will make profits," said Liu Qi, president of the Beijing Olympic Organizing Committee (BOCOG), during an interview with Xinhua on the eve of the 500-day countdown.

"And the money will go to establishing a foundation to help sport projects in developing countries," he added.

BOCOG has said the operational cost of the 2008 Games would not exceed that of Athens 2004 -- around 2.4 billion US dollars.

Praise was heaped on the Beijing organizers' overall competence, especially for the quality of the venues.

During his visit to Beijing last October, International Olympic Committee president Jacques Rogge described the venues here as "the best I have ever seen" but warned that perfect infrastructure was not enough to guarantee a successful Games.

"We should all remember that the Games are not judged solely by the technical proficiency of the project, but also through the perception that the world has of the Games," said Rogge.

"We must therefore ensure that while all the technical elements are in place, that we do not forget to look after the less tangible elements that will ultimately shape the world's image of China and the Beijing Games."