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China Football. Kick- off.

Purchase of European teams, players and famous coaches. What’s behind this great Chinese investment? It is not just passion for football but a clear political and economic project.

The Chinese football phenomenon is developing in parallel with the country’s economic growth. The Chinese Super League was founded in 2004, a decade after the Jia-A League became the first professional football league in China’s history.One of the great supporters of Chinese football is precisely Xi Jinping, President of the People’s Republic, as well as General Secretary of the Chinese Communist Party, who has repeatedly stated that the great Chinese dream of patriotic rebirth is by no means disconnected from football.

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While Xi was still vice-president in 2011, he expressed three wishes for China’s soccer future – for the country to qualify for another World Cup, to host a World Cup and to win a World Cup by 2050. These goals would crown the celebrations scheduled to be held in 2049 for the anniversary of the centenary of the country’s Declaration of Independence, proclaimed by Mao Zedong in 1949.
Football, for Beijing, is not just a sport or a fruitful business for investors and sponsors, but is a crucial political and social matter. It is the great dream of the Chinese Renaissance.

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Over the last three years alone, China has spent several billions for the country’s  purchasing campaign, the infrastructure modernization and the purchase of foreign football teams – such as Manchester City, Wba, Aston Villa, Birmingham, Wolverhampton, Atletico Madrid, Espanyol, Granada, Sochaux, Auxerre, Nice and Milan. And this is just the beginning. Those who have taken the most advantage of all this are many Chinese realtors who have become rich through building speculation. Realtors  rank among the richest entrepreneurs in China therefore it is no surprise  that in the China Super League, the current A championship, the owners of 11 teams out of 16 are people whose business is also related to the real estate sector.
This year China has spent almost $ 545 million, three times more than last year, turning out to be the fifth biggest spender in world football behind England, Germany, Spain and Italy.

Football schools

Despite substantial investments, Chinese football lacks talented players.  After tying with Siria 2-2 (June 2017),  China is already virtually eliminated from the qualification for the  2018 World Championship which will take place in Russia.

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Wang Dengfeng, vice president of the Chinese Football Federation, has said that a plan has been approved in order to establish 50,000 coaching schools across the country within a decade, with a goal of having 50 million competent players — men and women — by the turn of the century. Furthermore, football activities will be linked to education in schools and seventy thousand new sports fields will be established in the counties all over the country.

Budget holes and new rules

The Chinese dream of becoming a world football superpower, however, may turn into a nightmare. The amount of money which has been spent to purchase foreign players and teams has begun to appear exaggerated. Football is no different from any other economic and financial sector and it will have to conform to the same limitations and controls by government authorities.

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So in the face of a $ 670 billion hole, it can only be said that the investment in football still does not seem to be profitable. Each of the sixteen teams participating in the Super League has, on average, a $ 74 million financial loss. The responsibility of all this, is also to be attributed to the inability of the teams to gain supporters and to develop an effective merchandising industry. On this basis, the General Administration of Chinese Sport recently dictated new rules, imposing a clampdown against “irrational investment” and stating that each team can have a total of just five foreign players, and that no more than three foreign players can be deployed during a match. According to the new rules, each team is also supposed to deploy two young Chinese  players under  the age of twenty, one of whom is to be deployed from the first minute of a match. The Chinese government  has also imposed restrictions on the export of capital outside China, which has created some difficulties for the purchase of teams and players.

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However, as vice governor of the Chinese Central Bank, Pan Gongsheng said, China’s government authorities have not ordered the blocking of capital for the development of the football sector, but they have simply sought to rationalize the sector in financial terms and to raise awareness among the entrepreneurs who are involved in the football business on the importance of having a sustainable budget model over the medium to long term. By doing so, the Chinese government also is also trying to prevent some investors from creating black funds abroad with the excuse of investments outside the country.

John Scravaglieri

 

 

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