Few may know, but the origins of Football can be traced back to Imperial China. The very earliest form of the game was an exercise founded in a military manual dating back to the second and third centuries BC in China. A small leather ball filled with hair and feathers had to be kicked into a small net fixed onto long and thin bamboo canes without using the hands. Tsu’ Chu was its name, but it died out centuries before modern football was adopted in China.
Tradition was lost, and Football in China was forgotten. At present, the country’s national team ranks 77th worldwide, behind even North Korea and it has not qualified to compete in the World Cup since 2002. Given these facts, it could be deduced that Chinese people do not care about the sport, and teams are scarce and mediocre, but it’s quite the contrary: China has a massive number of football supporters, with an estimated 350 million Premier League fans, and on recent years, local and international investment have skyrocketed – driven by private sector business leaders as much as by the government.
Manchester United played Borussia Dortmund in a friendly in Shanghai on July of 2016.
To comprehend the rise, current development and future of Football in China, we’ll explain briefly the following key aspects: Government’s desire to make the nation a Football superpower, wealthy team owners ready to invest inside and outside China and a huge growth potential of the football business within the country.
People’s Republic of China, the next sport powerhouse
Chinese president, Xi Jinping, has the aim of expanding China’s economy beyond manufacturing, and has selected entertainment and sport as areas for growth. Building the world’s biggest sport economy is an important objective, so he wants at least the industry to grow into a $850bn one by 2025. At the heart of the country’s sporting investment is football, which the state is very keen to promote.
It’s not a secret that the Chinese president Xi Jinping is an avid football fan and has personally encouraged Chinese football to become the best in the word. With that in mind, he recently released a 50-point plan to put his nation firmly on the football map. “Revitalizing soccer is a must to build China into a sports powerhouse as part of the Chinese dream. It is also what the people desire,” said the central reform leading group, led by Xi, who wants to host the 2025 World cup and build the foundations of a national team capable of seriously disputing the title. Football education is mandatory since 2015 in Chinese schools and academies offering specialized football training are to be hoisted from 5,000 to 50,000.
Wealthy Team Owners
Companies with big wallets have acquired numerous teams of the Chinese Super League. As many other club owners, such as Abu Dhabi United Group, who bought the majority of Manchester City’s ownership, or Qatar Sports Investments (QSi), who owns the club Paris Saint-Germain, Chinese investors seem to have endless resources to spend. For example, Guangzhou Evergrande, the most successful Chinese club in recent years, is financed by Evergrande Group (60%), one of China’s biggest construction firms, and Alibaba (40%), the world’s largest and most valuable retailer since April 2016. Jiangsu Suning are owned by the Suning Commerce Group, one of China’s biggest privately-owned retailers and Beijing Guoan’s primary shareholder is the CITIC Group, a state-owned investment company.
As the graph shows, Chinese clubs have increased their spending exponentially. More than half of the 16 teams in the China Super League are spending now around 1 billion yuan (158,840,000.00 USD) a year, buying players and bringing foreign managers to level up the league. It is speculated that football investment relates to political favors. In a rather bureaucratic and totalitarian nation like China, investing and spending lavishly millions on famous players is a way to show commitment with the country’s aims.
Graph taken from Bloomberg.
Anyways, rather than acquiring former and old international football starts, as it happens in Arabia and North America, seen as retirement leagues, China’s leading teams are among the most aggressive competitors around the world for top international stars. Some examples include the Ivorian player Gervinho, bought from Arsenal for US$21 million, Alex Texiera from Brazil bought by Jiangsu Suning for US$55 million, Hulk – Givanildo Vieira de Souza- by Shanghai SIPG for 58.6 million euros and Oscar, bought for £60 million also by Shanghai SIPG.
Additionally, to build local expertise on the football business, Chinese billionaire have put their eye overseas to acquire ownership of top clubs which will provide knowledge of the way the industry works, and at the same time earn enormous profits. Suning Holdings has paid US$270 million for Inter Milan, while Wanda Sports Holdings has bought a 20 per cent of AC Milan’s ownership. Wanda has also acquired a 20 per cent stake in Atletico Madrid for US$52m. Media magnate Li Ruigang has bought a 13 per cent stake in Manchester United for US$400 million, toy manufacturer Tony Xia has paid £76 million for Aston Villa and Manchester City is 13% owned by China Media Group, a State organization.
Enormous growth potential
The Chinese Super League has very little to compete with. Though Football isn’t extremely popular in the country, there’s no other sport of that size in China. The CSL already has an average attendance of 20,000 (similar to La Liga); it has doubled this figured in a year and is expected to reach 30-40k in the next years as interest in the leagues increase.
Guangzhou Evergrande playing a match of the Chinese Super League with their stadium full.
Chinese population, with approximately 1.35 billion people, can induce TV viewership of the league within the nation go up exponentially, and with huge viewership comes huge sponsorships. The league has been boosted by a new deal with broadcast rights to transmit the matches on TV worth $1.25 billion over 5 years, which means that the league will receive more or less $200 million in 2016; that’s an enormous step, given the fact that the league received $9 million in 2015.
Professor Simon Chadwick, the chair in sport business strategy and marketing at Coventry University, says in an interview with The Guardian journal with respect to Chinese recent investments: “the lesson from other business sectors is that China will get it right eventually. When it does, it could tilt the sport on its axis […] Given China’s recent record in other industrial sectors, one suspects that ongoing Chinese interest in football could well have a profound effect on the world’s favorite sport,” he concludes. It will be fascinating to watch how this powerful attempt to attain influence in football will impact China in the coming decade as a soccer power. We hope it’ll all be for the good of this beautiful sport.