Soccer City: Shanghai – in the eye of the storm
Posted on March 11, 2020
CHINESE football is in suspension at the moment and the future looks very uncertain as the Coronavirus grips the world. Indeed, China as a whole, along with its trade and international reputation, is certainly all under threat.
Shanghai is China’s economic behemoth, a description more in keeping with its modern-day status than twee tags such as “the pearl of the Orient” or the “Paris of the east”. Shanghai is China’s wealthiest city and will be one of the host locations when the country stages the FIFA Club World Cup in 2021.
Given the city has a population of 24 million, making it the third biggest “megacity” across the globe, it is no surprise that Shanghai has two major clubs in China’s footballing economy: Shanghai SIPG and Shanghai Greenland Shenhua.
China’s ambitions in world football are well documented and the Chinese Super League (CSL) has grown significantly over the past decade. Average attendances, for the time being, may have plateaued and with the Coronavirus likely to impact on crowds going forward, when the CSL eventually comes out of quarantine it will be very interesting to see what the Chinese public’s appetite is like.
The average gate in the CSL was 24,000 in 2019, a figure that has remained more or less constant over the past five years. Shanghai SIPG and Shanghai Greenland Shenhua both averaged 21,000 in 2019, but SIPG have moved to the 16,000-capacity Yuanshen Sports Centre for the 2020 campaign while a new stadium is being built for the club in Pudong.
SIPG is the acronym for Shanghai International Port Group, a conglomerate that also owns two Chinese banks. They took over in 2015 and Shanghai SIPG became one of the more aggressive Chinese Super League clubs over the next couple of years in the market, signing Oscar from Chelsea for £ 60 million and Hulk from Zenit St. Petersburg for £ 45 million.
In 2018, Shanghai SIPG won the CSL with Oscar and Hulk playing key roles. While Chinese striker Wu Lei was top scorer with 27 goals, the Brazilian duo provided 19 and 12 assists respectively.
The club’s penchant for Brazilians has continued this year with the signing of Ricardo Lopes, who has joined from South Korea’s Jeonbuk Hyundai Motors. Lopes described Shanghai as a “charming international metropolis” and said he was “full of motivation and desire to fight for the honour of the team”.
But the Chinese transfer market has virtually collapsed due to the virus as well as a number of measures introduced by the Chinese Football Association to encourage clubs to develop their own talent. These include a 100% tax on foreign signings of more than 45 million yuan, the equivalent of € 6 million, and a salary cap that restricts players from earning more than € 3 million after tax. Fortunately for Shanghai SIPG, these rulings do not apply to existing contracts. Oscar, for example, is reputed to be earning € 26 million per year.
Shanghai Greenland Shenhua play at the 33,000-capacity Hongkou stadium, the first football ground to be built in China. The club itself is from Kangqiao, a suburb of Shanghai. In 2012, the club’s then-owner, Zhu Jun became very ambitious and signed players like Didier Drogba, Nicolas Anelka and Giovanni Moreno in a bid to make them into title contenders. This era ended in 2014 when Greenland Holding Company bought the club and changed its name, a move that did not please many of the supporters. The last time that Shenhua finished top of the table was in 2003, but the title was taken away due to match-fixing.
Shanghai Greenland Shenhua won the Chinese FA Cup in 2019 for the second time in three years, beating Shandong Luneng Taishen in the two-legged final and qualifying for the AFC Champions League 2020. The current squad includes Moreno and Italian winger Stephan El Shaarawy. Nigerian forward Odion Ighalo has recently gone on loan to Manchester United.
Shanghai SIPG finished third in the CSL in 2019 and also gained entry to the AFC Champions League. Chinese clubs have only been AFC winners three times and no team from Shanghai has reached the final. The competition has also been put on hold and neither SIPG or Shenhua have started their group stage games yet.
With both Shanghai clubs in the CSL enjoying strong backing, it is unlikely they will be under the sort of pressure other Chinese clubs are currently experiencing. Tianjin Quanjian, which has now changed its name to Tianjin Tianhai, is currently being managed by its local Football Association after the arrest of the club’s leader in 2018. The club avoided relegation in 2019 but its finances are in a bad way and, almost in desperation, Tianjin Tianhai is now available to be taken over free of charge. The Coronavirus, coupled with China’s economic slowdown, has placed a number of other clubs in a precarious position.
That includes Shanghai Shenxin, who have quit the Chinese Football Association’s professional league after failing to pay their players. The club has appeared in the CSL but was relegated in 2015. China’s lower division clubs have been paying far too much in players’ wages, leaving little flexibility in the event of an economic downturn. With football now in limbo, they have become even more vulnerable.
As for the CSL clubs, the government is insisting that players must undertake “spring military training” while football waits to resume. Nothing, it seems, must get in the way of President Xi Jinping’s dream of making the country a footballing power. Teams must undergo 16 hours military training every week and players must not allow their body fat percentage to go above 11%.
Should the crisis prove to be very extensive, Chinese football will not be the only league that comes under pressure. There are lessons to be learned, mostly about provisioning for bad times as well as good and not to allow club finances to become over-exposed to short-termism. When the dust eventually settles, Shanghai, with its financial clout and influence will surely remain among China’s top football cities. The question is, how much damage will be done elsewhere?