Soccer chat absent at China’s Communist Party Congress, but message to investors is still clear
Xi Jinping’s speech suggests the coming years will see China focus on the ‘Belt and Road Initiative’, building the country’s capacity to compete with the world’s sporting best
How times change. Not so long ago there was intense speculation that English Premier League club Liverpool would soon be under Chinese ownership, and that Chelsea star Diego Costa was heading to the Chinese Super League for a world record breaking transfer fee. Neither happened.
This year, Chinese state authorities have repeatedly sought to curb such spending excesses by implementing several measures (such as a 100 per cent tax on overseas player signings), while issuing statements warning China’s investors in football to refrain from engaging in irrational overseas deals.
Against this backdrop, the 19th Communist Party Congress has been taking place in Beijing. Never before has this meeting attracted such interest from football fans across the world – from Newcastle United supporters anticipating a Chinese takeover of their club, to World Cup watchers looking for signs of a bid to host the tournament.
As President Xi Jinping took to the stage for what proved to be a long congress speech, it was not expected that he would make explicit or specific reference to football, and nor did he. However, there was still plenty in the body of his three-hour presentation to signal what football should expect in the coming years.
There are several tenets that Xi has always wanted as the legacy of his presidency, and congress both reiterated and reinforced these. Not least of them has been a drive to eradicate corruption from all walks of Chinese life. Football has thus far been no exception; indeed, this summer Inter Milan’s biggest shareholder (China’s Suning) was accused on Chinese state television of using the Italian club to launder money. In the past, Guo Guangchang (owner of Wolverhampton Wanderers) has similarly fallen foul of the authorities.
In restating his intention to continue tackling corruption, Xi sent a coded warning to those in football engaged in corrupt activity: that they will be chased-down and punished. There is a sense, too, that the label of ‘being accused of corruption’ may continue to be judiciously used by the state to reign-in errant football investors. As for those intermediaries taking their ‘cut’ from deals with China, they had better be careful.
A second element of the Xi manifesto has been to ‘make China great again’, a goal that predates Donald Trump’s similar ambition for the United States.
The Chinese President’s speech was therefore littered with references to “great power”, “mighty force” and “China Dream”. However, one passage particularly caught attention, especially for the way it chimed with China’s previously stated football ambitions.
Xi explained that, “[By 2050, China] will stand proudly among the nations of the world ... and become a leading global power.” The country’s football reform plan, published in 2016, similarly identified that China aims to be a leading football nation and have won the men’s World Cup by 2050.
Aside from 2050 looking like it could be a big year for China, the implication seems to be that Xi foresees football being a constituent part in a broader plan – a plan that will ultimately result in China ascending to what he sees as the country’s rightful position as the world’s top nation.
Winning the World Cup is one expression of this. Although, as Xi already believes, football is a means through which China can engage with other countries, exert influence and secure access to scarce natural resources.
This ties-in with another of the president’s big projects, the “Belt and Road Initiative”. Earlier this year, the Chinese government announced future overseas football investments will only be permitted by the state if they are linked to the belt and road plan.
Some of the country’s existing deals in football clearly fit into this agenda. For example, the way in which stadium diplomacy has been used in Africa to secure access to the continent’s natural resources is already well-established.
That Xi focused on belt and road during his address was unsurprising and should serve as a warning to speculators around the world that Chinese investment in, for example, football clubs will need to be closely related to the Belt and Road Initiative. As such, clubs in strategic locations (such as port cities or located close to oil reserves) would seem more likely to become the target of Chinese investors.
In the same way that belt and road has recently been used to moderate overseas investments in football, so too has been the naming and shaming of certain investors (Wanda’s Wang Jianlin perhaps being the most notable example). A concern in China has been that some organisations have invested too heavily in other countries, often using loans from Chinese domestic institutions. This has exposed China’s financial system to a considerable amount of risk and raised concerns about currency flows out of the country.
In addressing the congress, Xi emphasised that his government will take control of the financial system and limit borrowing. He also asserted that China’s economy should be put on a sounder footing, and be less exposed to financial risk and uncertainty.
Media sources have speculated in recent weeks that loans used to buy football clubs might be called-in by the Chinese government (AC Milan was most notably mentioned). However, Xi’s speech made no reference to any specific club.
It therefore remains to be seen what happens next, not just to AC but also to their city rivals Inter, as well as to clubs stretching from West Bromwich to Den Haag to Granada. What appears more certain is the excesses of the last three years are now a thing of the past, and that Chinese investment in overseas football properties is likely to be more considered and strategic in the future.
It is also likely to mean that whatever football investments the Chinese do engage in must have a much stronger domestic focus. Xi’s desire to protect the national interest will mean the country focuses on the development of grass roots football, which the President hopes will create a sustainable flow of talent that delivers on his bold 2050 vision.
This piece is published in partnership with Policy Forum, an academic blog based at the Australian National University’s Crawford School of Public Policy.