China’s football troubles reflect broader issues within the economy

IT WAS A hot and sticky night for football. Because of covid-19 restrictions, the match was played at a neutral site, nearly three hours from Shanghai by car. Adding to the inconvenience, kick-off was at 6pm on a Monday. Yet a few thousand supporters still made the trek on May 10th to watch their beloved local side, Shenhua, battle the club from Hebei, a northern province. “It’s a kind of faith for us,” said A.G. Wan, a middle-aged businessman.

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Cries of sha bi, a phrase not translatable in a family newspaper, rang out whenever the referee missed fouls that, for the fans, were plain to see. Cheers erupted when a Shenhua midfielder scored the equaliser with a perfectly struck last-minute penalty kick. The crowd’s passion would have been familiar to football fans anywhere. But the canvas on which it was painted—a league beset by financial chicanery and political meddling—was unmistakably Chinese.

China can seem like an economic juggernaut. Leaders set lofty targets and funnel money to favoured industries, a potent recipe when combined with talented, driven people. Football shows a less flattering side of its system: how the top-down approach that has worked well to build bullet trains can fail in less predictable domains.

The government has high ambitions for football, encapsulated by President Xi Jinping’s stated dream for China to win the World Cup some day. That day remains distant. The national team is ranked 77th in the world, behind tiny Curaçao. And domestic leagues, a crucial building block, are mired in mediocrity.

To understand what has gone wrong, look at the Chinese Super League (CSL), the country’s main football contest. Three months after winning its first-ever CSL title, Jiangsu Suning disbanded in February, tripped up by slowing growth and a more conservative political environment. The team’s owner, Suning, an electronics retailer, has been trying to pay down its debts, like other overstretched Chinese firms. Not long ago a football champion would have attracted buyers, even if bleeding cash. These days, though, few tycoons dare to acquire trophy assets. In all, more than 20 teams have left China’s professional leagues in the past two years.

The economics of football in China are atrocious. Average annual salaries for players of $1.2m in 2019 put the CSL roughly in line with Ligue 1, France’s top division. But revenues in China are piddling, with tickets regularly costing as little as 50 yuan ($8). Guangzhou Evergrande, a club renowned for its profligacy, took in only a third of the 2.9bn yuan ($450m) that it spent in 2019.

Moreover, most wages go to a few extremely expensive players, often imported from abroad, sometimes well past their prime. Carlos Tevez, a faded Argentinian star, described his spell with Shenhua in 2017 as a “vacation for seven months”, despite reportedly earning $40m. In the 1990s foreign clubs rarely gave their Chinese counterparts the time of day, says Joseph Lee, a powerful agent. Now, he says, they view China as “stupid” money.

Why have teams burnt cash with such gusto? Partly it is about branding. Xu Jiayin, the billionaire behind Evergrande, a property developer, once said that owning a football club ensured that his company made the evening news at a fraction of the cost of advertisements. But China’s tycoons are not just targeting consumers. They see Mr Xi’s professed love for football as a way to connect with him. After he rose to power in 2012, Chinese money poured into starry European clubs, from Inter Milan to Manchester City.

The past year has made clear that, far from appreciating their investments in football, Mr Xi and his advisers see them as a red flag. Companies including Fosun, Wanda, CEFC, TEDA and Guangzhou R&F were among the big spenders, and all have had their finances come under scrutiny. There is talk that some entrepreneurs overpaid for players or for clubs in order to skirt China’s stringent capital controls (the suggestion was that they had kickbacks paid into their accounts abroad).

So the government has introduced tough new rules, a crackdown that parallels Mr Xi’s efforts to reassert control over the broader economy. Politically, there has been a push to induct more footballers into the Communist Party, much as private companies are pressed to set up party branches. And the Chinese Football Association has capped salaries at 5m yuan for Chinese players and €3m for foreigners. It also ordered clubs to drop corporate titles from their names. Guangzhou Evergrande has become Guangzhou.

Ma Dexing, a football columnist, sees the restraints as progress. “Over the past 30 years professional football in China has been chaotic,” he says. Mr Lee thinks the changes have been rash. “It’s like half the building was good and the other half rotten, but they demolished it all,” he says.

The new rules also display officials’ penchant for micro-management. In 2017, to boost youth development, the football association required clubs to field an under-23 player for every match. Managers gamed that rule, substituting youngsters after as little as a minute. So the football tsars mandated that they must play for the whole match. “The narrative every year ends up being ‘How have the rules changed?’,” sighs Cameron Wilson, founder of Wild East Football, a website devoted to the Chinese game.

For China’s national football team, the fundamental problem is not at the elite level but at the grassroots. In big cities there is little space for children to kick a ball around. A hyper-competitive education system, in any case, leaves them little time for play. Officials had hoped that glittering football academies would help. The world’s largest was opened by Evergrande in 2012 with 50 full-sized pitches. So far, though, none of its thousands of graduates has made the senior national team.

The football association has also tried to identify promising players early in life, placing them in development programmes—an approach that works for table tennis and diving but does not translate so well to team sports. “You don’t need an under-15 national team. You need thousands of under-15s playing,” says Joan Oliver, former boss of Barcelona, who now owns Beijing Institute of Technology Football Club in China’s second tier.

With qualifying matches for the 2022 World Cup coming up, the government wants short cuts. Over the past three years China has started naturalising foreign footballers. On May 10th it named five, including three Brazilian-born forwards, to its squad. Mr Xi has called for greater self-reliance in China’s quest for global power. Football is a stark reminder that it still needs foreign imports.

This article appeared in the China section of the print edition under the headline “Own goal”

The Economist

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