The Political Economy of Football V2

In the space of 10 days in early January 2016, the Chinese Super League (CSL) transfer record was broken three times. First, Jiangsu Suning paid Chelsea £24 million to sign Ramires. Then Guangzhou Evergrande paid Atletico Madrid £25 million for Jackson Martinez. Unwilling to be outdone, Jiangsu Suning went even higher, gazumping Liverpool to lure Brazilian winger Alex Teixeira from Shakhtar Donetsk in a deal worth £38.5 million. And that was just the transfer fees. The wages were on another level. Ramires saw his salary double to more than £10 million a year. Likewise Teixeira, who was not even a full international. All of this had been encouraged by President Xi Jinping, who had declared an ambition to turn China into a “football powerhouse”. Huge corporations such as Suning (retail) and Evergrande (real estate) had been urged to bankroll the CSL. In return, they would gain greater global exposure for their brands and, significantly, presidential approval. But...

The big spending days in Chinese football are coming to an end as a series of measures are announced to restrain spending: Salary cap Limits on investment by owners will be lowered from 2019 to 2021 and clubs will be expected to break even. A salary cap will be introduced. The 100 per cent tax for expensive foreign players will be maintained. The Chinese authorities do not want foreign exchange being spent on ageing players. They want to develop domestic football and the national team which means offering pathways for local talent.

China's long march into football forms part of a 'soft power' strategy, but it may not pay off and Chinese investment in European clubs may now be past its peak. Chinese tycoons have invested more than $2.5bn in European clubs over the past three years from giants like Manchester City and AC Milan to smaller outfits such as FC Sochaux in France and Northampton Town. The most expensive investment was $797m to buy AC Milan, followed by $400m for a 13 per cent stake in Manchester City and $270m to buy Southampton. For the Chinese government it's part of a wider strategy to increase the country's soft power and earn China its rightful place on the world stage. Powerful leader President Xi Jinping told the Communist Party's five-yearly congress last month that the 'extensive development' of competitive sports had helped boost the appeal of China's 'underlying values', increasing its 'soft power and influence'. However, exporting soft ...