China Watching

2021-02-25 Cecilia Attanasio Ghezzi

Chinese Soccer Falls Flat

The 14th Five-Year Plan, that will be approved by the Central Committee of the Communist Party of China in March 2021, formally establishes that entrepreneurs’ money "is to return to the Fatherland and investments are to be concentrated on domestic activities." From this standpoint, the divestment from "non-relevant" activities imposed by the government of Beijing can explain the cuts in investment in the world of European soccer: from Atletico Madrid to Slavia Prague, to the recent case of Suning with Inter.

It seems that Suning intends to sell Jiangsu, the team that won the Chinese soccer championship last season. And it is certainly seeking funding to deal with the liquidity problems of Inter, it's European crown jewel. The move appears to be part of a plan to divest from "non-relevant" activities implemented by the Nanjing giant after the financial problems linked to the pandemic and the invitation from the central government to block investments abroad by Chinese companies.

In 2017, there were 20 European clubs in the hands of Chinese investors; today, that number is less than 10, and it's still falling. But wasn't the dream of becoming a soccer power part of the grand ambitions of Xi Jinping? 

As soon as he was designated president of the most populous country in the world, in 2011, Xi Jinping expressed three wishes: he wanted the Chinese national team to qualify for another World Cup, for China to host it, and for China to finally win one. In the first book that celebrated his vision (The Governance of China, published in Italy by Giunti Editore in 2016), there is a large picture of Xi in which he is dribbling, looking satisfied; and the Council of State had even issued directives to bring the leader's dreams to fruition. In March 2015, the decision was made that in the next 10 years China was to have 50,000 soccer schools, compared to the 5,000 existing at the time. The goal was to fill them with 30 million kids and have at least one regulation field for each county. With Chinese speed, of course, it was announced that 70,000 new fields were already being built. Thus, in the first half of 2016, the teams in the top category of the Chinese professional league had spent almost 330 million euros on top foreign players, while the equivalent of our B League had spent another 100 million. European clubs were bought up, and the partnerships with our soccer world grew exponentially.

In 2017, the music had already changed:[1] the Chinese Football Association had begun to put a limit on the purchase of foreign players, and above all, on their massive salaries. In the meantime, the goals set publicly in 2018 had all failed: not only did the national team not qualify for the 2020 Olympics in Tokyo, but it did not even make the semifinals of the 2019 Asian Cup, nor did it crack the top 70 positions in the FIFA.[2] We still have to see if China will qualify for the 2022 World Cup. So at the end of 2020, the Chinese Football Association tightened the rules again: the maximum salary for each player is to be 5 million yuan, and the sponsor can no longer appear next to the team's name.[3] 

In 2020, the crazy spending of the last five years led to the disqualification of 11 teams for financial reasons, including historic names such as Liaoning FC and Tianjin Quanjian.[4] The 14th Five-Year Plan, that will be approved in March 2021, formally establishes that "the money [invested abroad] is to return to the country and investments are to be concentrated on domestic activities,"[5] and the country's richest men risk being crushed due to any step that isn't completely coordinated with the dictates of the leadership (the case of Jack Ma is exemplary[6]).

In the world of soccer, these signals were felt even earlier: in 2018, Wang Jianlin, the tycoon of Wanda Group, was forced to divest from Atletico Madrid; in 2019, Ye Jianming, founder of CEFC China Energy, sold his share of Slavia Prague because his company had been placed under administration by the state. Thus, gradually, almost all Chinese investors began to bring their money back home, just as the government is demanding. There will be incentives, certainly. But the point is political: in China nobody can disobey the Party, and what is private is never completely private.

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