About ten years ago, Chinese President Xi Jinping said: was a dream: turn the country into a world football power. These ambitions were quickly matched by action and money. Chinese conglomerates poured money into the country’s domestic league. even attracting soccer stars from Europe. Some firms have spent money buying up shares of European clubs to raise the standards of Chinese football.
But China’s ambitions have never materialized – and may be on the verge of complete collapse.
On Wednesday, US asset management company Oaktree Capital took overItalian football club Inter Milan after its Chinese owner Suning Holding Group failed to repay its €395 million ($429 million) debt on time. Suning offered its stake in Inter Milan as collateral.
Suning’s loss of its ownership of Inter Milan is part of a wider exodus of Chinese companies leaving European football. As many as 20 European clubs belonged largest Chinese investors in 2017; by 2021, this number has dropped to 10.
Claudio Villa—FC Inter/Getty Images
Suning’s forced exit from European football caps is a decade-long experiment to see whether flashy multi-billion-dollar deals targeting elite sports can create a true football giant.
“Looking back, there weren’t many great examples of success,” says John Durden, a longtime soccer reporter in Asia. China’s ownership of these European clubs has not resulted in major investments or significant wins on the pitch. Several Chinese owners have sold their stakes in professional European clubs within a few years of buying them.
This large foreign investment in elite professional football has also not translated into domestic success. The Chinese national team has not taken part in the World Cup for more than two decades.
China’s entry level is “broken,” says Tom Bayer, a soccer youth development consultant in Tokyo, Japan, with experience in China’s soccer system. “The main driving force of football is culture, and in China there is no culture. Most Chinese families view football as a distraction from education and do not want their children to play.”
“The World’s Football Superpower”
China’s football performance is a big setback compared to the ambitious plans unveiled in the mid-2010s.
In 2016, Suning bought a 70% stake in Inter Milan, one of the most high-profile forays of Chinese businesses into European football. That same year, organizations such as the Chinese Football Association put forward plans transform China into a “global football superpower”.
Other Chinese companies, benefiting from the country’s booming economy, have bought stakes in European clubs. Dalian Wanda Group bought 20% shares of the Spanish club Atlético Madrid in 2015 and then signed a five-year naming rights agreement when Atlético moved to their new stadium in 2017. Fosun International bought English club Wolverhampton Wanderers in 2016.
Football fans at the time were not bothered by the club’s new Chinese ownership. “Nationality is secondary. As long as the results are good, fans tend to put those concerns aside,” Durden said.
Conglomerates have also poured money into the Chinese Super League, the country’s top domestic soccer league. In 2010, China Evergrande Group—then one of the country’s largest developers, several years before its collapse triggered today’s real estate crisis—bought Guangzhou FC. Since 2016, Evergrande has financed costly player transfers from Europe to China. Other Chinese football club owners, including Suning, have also financed their transfers from Europe.
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At some point CSL competed The largest leagues in Europe by money spent on transfers. The company spent €418 million ($453 million) in 2016 and €543 million ($589 million) in 2017, according to Transfermarkt, a football website that compiles data on player transfers.
But as soon as things started to take off, the authorities stopped realizing these ambitions.
Chinese Football Association ordered the clubs limit “irrational spending” on foreign players in 2017, as well as limiting their presence in top teams to support local talent. Three years later, in 2020, CSL booked sponsors remove their brands from local clubs.
Then money became tight. Beijing’s efforts to curb excessive borrowing in the real estate sector have plunged Evergrande into a liquidity crisis. Government bodies took over the company’s football stadium at the end of 2021. (By the end of the year, Evergrande defaulted on its overseas debt).
Former Inter Milan owner Suning also faced cash flow problems. Conglomerate shares in subsidiary Evergrande fell in price how the parent company failed. E-commerce rivals such as JD.com have also put pressure on Suning’s core retail business, limiting its ability to finance operations at its local club Jiangsu Suning FC. Club disbanded in front of the 2021 season, right after he won his first CSL title.
Suning’s loss to Inter Milan last week wiped out the fortunes of company founder Zhang Jindong. The former billionaire was worth about $6 billion when his company bought Inter Milan in 2016, according to Bloomberg. calculations. Now it is close to zero.
Suning has made a name for itself in the retail industry by selling electronic products in thousands of brick-and-mortar retail outlets. With revenue of $35.5 billion for the 2020 financial year, the Chinese company took 328th place in the ranking. Luck’2021 Global 500 list.
This was the last time Suning made the list as revenue fell to $10 billion in 2022.
Who owns European clubs now?
Oaktree said in a statement shortly after taking control of Inter Milan: said this The initial focus will be on ensuring “operational and financial stability.” The company plans to attract more Italian and European members to the club’s board. (When Oaktree took over, people of Chinese descent made up more than half of Inter Milan’s board of directors, including its president.)
The US now has a greater presence in world football. Half of England’s top league teams now have some level US property. And Inter Milan now seventh club in the Italian top league will belong to an American company.
Gulf countries are also starting to buy clubs from Europe’s top leagues. Paris Saint-Germain, owned by Qatar Sports Investments, dominates the French league, while British club Manchester City, owned by a company controlled by the United Arab Emirates’ royal Sheikh Mansour, is winning both domestically and in Europe.
However, some ownership shares are controversial. Human rights activists and some politicians have criticized the takeover of Newcastle by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, as “sport washing” or the use of football to cover up human rights abuses in the country.
Will China ever be good at football?
Chinese male soccer players perform poorly on the world stage. The country’s men’s team is ranked 88th out of 210 teams, which is low for a country of its population. The team has only qualified for the FIFA World Cup once, back in 2002.
Bayer, who previously held positions in Chinese football at national level and at Beijing Guoan FC, says that “most people have no idea about youth development.”
While China has focused on the elite level, its neighbor Japan has instead targeted younger players. This “automatically increases the pool of elite players as the gap between the best and the least developed becomes smaller,” Bayer explains.
Japan first qualified for the FIFA World Cup in 1998, but has qualified for every competition since then. More Japanese players play in the top leagues of Europe, the pinnacle of professional football. (After Wu Lei, there are currently no Chinese footballers in Europe’s top leagues. left the Spanish club Espanyol in August 2022.)
China is currently participating in qualifying matches for the upcoming 2026 FIFA World Cup, which will be held in Canada, Mexico and the United States.
Even Chinese President Xi jokes about his team’s performance. In November, after China beat Thailand in a World Cup qualifying match, Chinese President told the Prime Minister of Thailand Sretta Thaweesin said it was “a great stroke of luck,” according to a post on official Thai government social media accounts.
“I’m not entirely sure of their level,” Xi Jinping said. “There are ups and downs.”