Building a football nation: The complex Chinese method (Part Two)

On 23^rd October 2015, the Etihad Stadium hosted the National Football Museum Hall of Fame. British prime minister David Cameron, the People’s Republic of China (PRC) President Xi Jinping, Manchester City chairman Khaldoon al Mubarak and Manchester United great Gary Neville were in attendance. The reason for their unique gathering was to induct Manchester City cult hero and journeyman Sun Jihai into the Hall of Fame.

It was a monumental honour for a right-back that had made 123 appearances in the Premier League and scored three goals. Sun had opened-up the Chinese market for the Premier League and ‘changed British fans’ image of Chinese players. However, the Hall of Fame, which includes the likes of Eric Cantona and Bobby Moore, was meant to be reserved for the greatest footballers to touch English football’s history.

A few weeks later, a possible answer to the enigma was given. The Manchester City Football Group sold 13% of the club to state-backed China Media Capital (CMC) for $400 million. A month prior, Sun had become City’s ambassador to China.

CMC is a Chinese media group investing billions into global football and the Chinese Super League (CSL). They paid $1.3 billion alone for exclusive rights for the CSL: a deal which was twenty times its predecessor.

The CMC-City agreement also resulted in the CMC chairman, Li Ruigang, sitting on City’s board. The Telegraph said in 2015 Li is known as the ‘Chinese Rupert Murdoch’ and has links to the Chinese government due to his experience as a high-ranking party official. Li told Shanghai-based The Paper, “The main purpose of this deal is to gain experience we could take to the Chinese sports industry.”

David Cameron and his Conservative Government received a flood of confusion and criticism. “This devalues our entire Hall of Fame,” Labour MP Clive Efford rebuked. “It’s a corruption worthy of Sepp Blatter.” The Guardian labelled the induction as an “ambassadorial role in enhancing the profile and popularity of English football to a Chinese audience.” Downing Street expectedly denied any involvement, but the seeds of major Chinese influence had already been planted.

President Xi seemingly ordered, or at least inadvertently gestured, Chinese businesses to invest in foreign football as a part of his reforms. Simon Chadwick, professor at Salford University and an expert on the Chinese football industry, believed they would gain recognition from the Chinese Communist Party (CCP) in return for complying.

“Investing in football is not about securing a financial return,” he said in 2016. “Rather it is about global power, influence and acceptance. Many individual entrepreneurs know that European football clubs don’t make money.

“The benefit for them comes in terms of the public message these investments send to the Chinese government. Hence, when Chinese entrepreneurs do business in China, they are likely to be viewed more favourably than those that aren’t seen to be supporting the football revolution.”

The double-edged incentive was there for the Chinese businesses and entrepreneurs to follow the CCP’s co-ordination. In return of promoting the understanding of how football operates in the west, especially amongst some of the best teams in Europe, they could receive certain domestic benefits.

Amongst this drive is the wave of Chinese influence creating a psychological normalisation of China being a key player in the football landscape – the acceptance the PRC desperately wants. Chinese figures approached this idea with ruthlessness while the European media watched.

China suddenly arrived on the West Midlands’ doorstep in 2016. Birmingham City was previously owned by Carson Yeung, a Hong Kong businessman who had links to mainland China. However, this was different. Chinese businessman Dr Tony Xia bought Aston Villa in June, Chinese conglomerate Fuson bought Wolverhampton Wanderers in July and entrepreneur Guochuan Lai bought West Brom in August. The three Chinese parties all, coincidentally, wanted to be football club owners at the same time, in the same area. Chinese tycoon Gao Jisheng also bought an 80% stake in Southampton for £210m in 2017.

In a video by Tifo Football, they alleged that these purchases could be down to other motivations. They noted how China has invested in the West Midlands transport network, and the new HS2 train line would be a lucrative opportunity. Particularly, Fosun, the owners of Wolves, financed $4.2 billion in China’s high-speed railway network.

This theory was sparked back in 2016 by Simon Chadwick. “Recent moves are entirely consistent with other industrial sectors,” he said, “where we have seen a state-driven form of capitalism emerge in which investors and corporations appear to have been working in coordinated ways.

“Add to this the British government’s active courting of Chinese investors, especially using football as a lever, and one can hypothesise a scenario in which Wolves, Villa and West Brom haven’t just been independently acquired for football reasons alone.”

While Xia’s ownership of Aston Villa was disastrous (which culminated in him selling the club) and Gao officially put Southampton on the market, the Wolves project has so far succeeded in the Premier League.

England was, and still are, only one of the numerous locations where Chinese ownership became a new phenomenon. United Vansen owner Wang Hui bought a 98% stake into ADO Den Haag, Ajax’s local rival, in 2014 (Dutch courts suspended him two years later for not meeting his financial obligations). The next year, Dalia Wanda, a Chinese property group, bought a 20% stake into Atlético Madrid for €45 million. Their new stadium name, which was announced in December 2016, was revealed as ‘Wanda Metropolitano’.

However, they sold 17% of their stake in 2017 as a part of their portfolio cutbacks, but their stadium sponsorship remained. Wanda’s football inroads grew further as they became one of FIFA’s major ‘global partners’. The deal gives Wanda rights to access all of FIFA’s competition and corporation activities. They were the first Chinese company to strike a deal of this calibre with FIFA. They are reportedly committed to the deal until 2030.

After the original agreement with Atlético, Chinese companies established a greater relationship with La Liga. The toys and games company Raster Group bought a 56% stake into Espanyol for an estimate between £10.1 million – £14 million and Desports Group gained full control of Granada for €37m. Lionel Messi also agreed to become a major brand ambassador for Huawei.

As a part of China’s domestic ambition to educate children and adults in football, La Liga was a natural mutual partner for this project. The Spanish top division has actively sought to help educate struggling football communities in other spheres of the world. In 2019, over 300 Spanish coaches were sent to the US, Middle East, Indonesia, India, and the Solomon Islands. Tied to this initiative, La Liga sent 200 coaches to China alone. La Liga announced 6,700 coaches and nearly 120,000 players have been trained in China thanks to the project.

China’s interest in ADO Den Haag also centred on this. Wang, The Hague’s owner, organised for multiple coaches to be sent to China’s school and, particularly, Xi’s old middle school. Ex-national team manager for China, Gao Hongbo, was sent the other way to become an assistant manager at Den Haag. Manager Henk Fraser was never given an opinion on his arrival.

Likewise, Germany had become a partner. In 2016, they agreed an apparent five-year ‘Sino-German Pact’. This allowed Germany access to Chinese media markets while the Germans educate players, coaches, and referees. The aim is to increase their national skills. Chinese Internet company, Baidu, has since formed a relationship with the Bundesliga. As of 2017, a believed 500 million views were reached on the platform in China.

La Liga has followed a similar path to Bundesliga where they have expanded their relationship with China. They teamed up with Super Sports, one of China’s largest sports and entertainment companies, and Mediapro, a Spanish media group which is backed by Orient Hongtai Capital Management (a Chinese equity company). The three parties signed a 15-year deal that gives the Spanish league exclusive commercial rights in the PRC.

China’s global expansion has allowed them to mutually tap into the expertise of western leagues. The greater media coverage will, in turn, grow a core football fanbase as they tune in for the biggest leagues in the world. This does not mean, however, that the PRC will not halt broadcasting if there are more urgent political issues. Simon Chadwick reported on the day of Liverpool lifting the Premier League title, CCTV – China’s state-run media broadcaster – demoted the match to CCTV5+ without explanation. Football finance expert Kieran Maguire stated on The Price of Football podcast the move was likely connected with the UK’s opposition to Chinese influence in Hong Kong and the banning of Huawei.

Even so, China’s global ambition will not and has not stopped. Beyond England, Spain, Germany, and the Netherlands, Chinese businesses and companies have invested in other countries. They bought into French clubs Lyon, Nice (albeit in a joint venture with an American investor) and Sochaux; Italian giants Inter Milan and AC Milan; as well as Czech side Slavia Prague. In Portugal, Chinese LED manufacturer, Ledman, agreed to sponsor the Portuguese second division but had to reverse their demand for there to be a requirement of Chinese footballers to play in 2016.

The co-ordinated investment into western football can be summed up by John Connell of The University of Sydney. “While such purchases have commercial overtones,” he noted, “they have also been designed to enable the transfer of overseas knowledge of coaching and strength and fitness training.

“More obviously, commercial investments have also been made by such companies, whose interests in football have been partly at the behest of the CFA [Chinese Football Association] and with whom the companies have ‘strategic partnerships’.”

Connell referred to the Dalia Wanda case where they announced a revolutionary plan to form a competition of the best teams from the ‘big five’ leagues in 2016. The planned competitive rival to the Champions League would have given Wanda significant revenue to then pour back into Chinese football. Even though it never came to fruition, ambition and desire were there.

Rowan Simmons, the author of Bamboo Goalposts, is a Chinese football expert. He explained to writer James Montague that Chinese figures have spent billions in football because of Xi’s love for the game.

“If you look at the deals, they don’t make sense financially at all,” he said in The Billionaires Club: The Unstoppable Rise of Football’s Super-rich Owners while referencing the CMC-CSL TV deal.

“Lots of money being spent without much care for their spending. That gap between what [something] is worth and what it cost is a political gap. All the money spent is done for political reasons. Depending on where you are on the rich list is your contribution level.”

Simmons’ analysis is supported by the fact that Xi believes China’s public, including its rich and the media, must have undying loyalty to the CCP. In 2016, Xi told state media, “They must love the party, protect the party, and closely align themselves with the party leadership in thought, politics and action.”

Building a football nation is a party thought and action so this is what has occurred. China’s rich concurred with Xi and began to normalise the PRC’s football role. As they built a portfolio of football clubs, this has become entangled within the PRC’s soft power, as explained in part one.

China has become a more lucrative household name for European clubs and players. The perception and desire to play or coach in the PRC has since transformed. Though, the vast contract and transfer fee inflation across the CSL created an unfeasible financial environment in recent years.

Early arrivals in 2011 saw managers Luiz Felipe Scolari and Sven Goran Eriksen, and players Nickolas Anelka and Didier Drogba, adventure into the CSL. Anelka reportedly earned €10m in 2012. Chinese club owners believed this is what Xi probably wanted as a part of his football revolution: bringing in big names to popularise the league and increase its quality.

Nevertheless, they most likely shared a naivety to believe players were there for the grand revolution, not the money. During the 2014-15 season, CSL clubs spent £81m on coaches and players – second only to the English Premier League.

Without any fundamental disapproval from Beijing, domestic investment into transfer fees and contracts continued. Demba Ba, Paulinho, Gervinho, Asamoah Gyan, Ramires, Jackson Martinez, Alex Teixeira and many more were signed in 2015 and 2016.

Martinez cost £31 million, despite scoring three goals in 22 appearances for Atlético Madrid – a record transfer fee at the time. Three days later it was broken with the Teixeira deal from Shakhtar Donetsk. The Brazilian’s fee was reportedly up to £43 million and has a contract worth €10m annually.

The Chinese transfer market became a worldwide phenomenon with clubs setting high fees, knowing that CSL clubs would pay inflated prices. Hulk was sold by Zenit Saint Petersburg for £46 million, Oscar by Chelsea for £60 million and Carlos Tevez for an apparent £71 million (in addition to a reported £615,000 per week wage). From a manager perspective, CSL followed suit by recruiting the likes of Fabio Capello, Gus Poyet, Manuel Pellegrini, and Andre Villas-Boas.

It was likely a directive was issued to control the unbalanced football economy in the PRC. A 100% transfer tax was introduced in 2018 to promote youth football and deter the fees and contracts which led to the climatic Tevez deal. In one example, Diego Costa’s move to Tianjin Quanjian doubled from £64 million to £128 million overnight due to the introduction of the tax. Quanjian never made the purchase.

Antonio Conte called the Chinese market before the reform as “a danger for all”. However, Arsene Wenger’s assessment in 2016 provided a better understanding of the type of threat he believed football felt. “I don’t know how deep the desire in China is,” he said, “but if there’s a very strong political desire, we should worry.” Despite the reform, the “strong political desire” Wenger described is still active as Xi made his thoughts on party loyalty in the same year.

China’s initial backtrack from a highly volatile football economy, centred on the contradiction it has with the other reforms discussed in part one. Chinese identity, patriotism, youth promotion and building a robust football structure were all highly prioritised by the CCP and Xi. China’s muscle-flexing in transfer windows was likely counter-productive towards these goals.

Instead, they preferred to realign with their reforms and focus on recruiting influential and experienced figures because they were sold by the Chinese Project, not their inflated contract. Rafa Benitez, who started his managerial CSL career at Dalian Professional in July 2019, is one instance for where this has worked. He was enthralled by the project he found at Dalian.

“It is another level,” he wrote in The Athletic. “Another way of doing things, another culture, but they believe in us, they listen to us and their priority is not just to make a profit.

“They are investing big money in developing a new scouting department, they are building a new training ground for the academy, the under-23s and, obviously, the first team. And, yes, they are using our experience to guide them.”

He continued, “The Chinese Federation tries to promote young players, which means the top teams like Guangzhou Evergrande, who have had the best young Chinese players for years, can manage better than us…. They expect us to leave a legacy, the basement on which to build something.”

Benitez’s experience also shows that China’s ‘soft power’ initiative is working. He insisted he did not take the job because of the financial incentives. The project has allowed him to use his wisdom and skill to contribute to enhancing Chinese football.

Luring Benitez from the Premier League to the CSL was, and still is, an undeniable coup. An even greater opportunity was FIFA’s decision to grant China as the first hosts of the revamped Club World Cup.

The summer tournament, and the first of its kind, will give the PRC and Xi the grandest of stages to show the progress they have made in becoming a football nation. China can display their new extravagant stadiums and portray its soft power to the world. They can demonstrate a nation that has finally arrived on the football stage by putting on the perfect show.

Although flamboyant, the Club World Cup will be a dress rehearsal for the larger prize Xi is eying. The PRC is rumoured to be among the candidates to launch a 2030 World Cup bid. This could cause a problem with FIFA, nonetheless, who have a rotation policy. It means a confederation which hosted one of the previous two tournaments, cannot host a third. Qatar will be the 2022 World Cup hosts, meaning China may need to wait a few more years until Xi is granted his wish.

If there is one thing we know about Xi, he has an intolerable desire to get what he pursues. The national humiliation China has experienced in football is a catastrophe for a country hell-bent on integrating patriotism into that very sport.

Xi’s crusade to building a football nation is complex. It is riddled with government nationalist directives, soft power, socialist collectivism and learning from the success in Europe. At the heart is politicisation and creating an image that is deemed acceptable by the world. It has been seen by China’s involvement in the West Midlands and the alleged politicisation of Sun Jihai’s induction into England’s Hall of Fame. “All aspects of life [has seen] recentralisation of control,” Simmons told Montague. “In the middle of this, football is said to be democratic.”

This is the difficulty in China becoming a football nation: football will be an extension of power. Xi’s authoritarianism has even been compared to Mao Zedong’s. The PRC’s increasing involvement is yet another challenge to the type of world global football has become. Knowingly, the sport will continue to welcome their presence. It will only be a matter of time when Xi’s crusade is complete, and he has built a dominating football power.