Chinese clubs spent heavily in the last transfer window, raising eyebrows as they took some big name players back to the Chinese Super League. As KPMG points out, more than EUR 300m was spent on the likes of Ramires, Ezequiel Lavezzi, Jackson Martinez and Alex Teixeira.
Football Benchmark’s report, Investment at home and away, says that such a bold move is not really a surprise given Chinese football’s current trajectory.
It is also closely aligned to the Chinese government’s plans to make the country a footballing super power. President XI Jinping is nursing a bold ambition – to host, and to eventually win, the World Cup.
It’s not just about bringing taking hired guns to China. The government will create 50,000 soccer schools by 2025 – nurturing youth is a key element of their strategy.
But as the report points out, Chinese business has been encourage to invest in football, both domestically and internationally. Since 2014, Chinese companies have bought stakes in six European clubs, ranging from full ownership (Souchaux of France) to minority stakes in Atletico Madrid and Manchester City.
Most major markets, with the exception of Italy and Germany, have been accessed. While Italian clubs have been in discussion with investors and a significant purchase could be imminent, KPMG believes that Germany’s so-called 50+1 clause may be a detterent.
For European clubs, securing Chinese investment also provides access to a new market, new supporters and new revenue streams. The financial benefit of owning a prized asset from the world’s most popular sport is only part of the story for China, though. Chinese investors have also prioritised the acquisition of international standard coaching and cultural knowledge of European football.
Chinese investment may also commit clubs to assist in the development of the sport across the country, such as Atletico Madrid’s support of football schools. Similarly, some Chinese sponsors insist on the participation of Chinese players in club competition – LigaPro, the Portuguese second-tier and the backing of Rayo Vallecano of Spain are just two examples of this development.
Although China has made no secret of its goal to become a credible contender, it still has some way to go. China’s only appearance in a World Cup, the 2002 competition held in South Korea and Japan, ended with three defeats and an early exit. On a regional basis, China has never won the Asian Football Confederation Cup, the best performance being runners-up in 2004 and 1984. China is currently placed eighth in Asia and 82nd in the world, according to FIFA rankings.
KPMG concludes that China’s insatiable appetite for expertise in the football industry suggests European football’s stakeholders are likely to continue benefiting from Chinese investment. Europe, one of the traditional homes of association football, represents an attractive market for ”Chinese investors, while China itself offers the opportunity for European clubs to broaden their investor base,” says KPMG.