How China is grabbing the world’s headlines for its ambitious football policy
China has once again been the world’s big spender in the January football transfer window, but suspicions remain that player salaries and values are being artificially inflated
A well-known figure in English football once commented that the sport is characterised by the ‘prune juice effect’. That is, whatever goes in one end, quickly goes out again at the other. The person in question, Alan Sugar, was specifically referring to the money generated by television contracts and how it gets spent on excessive player transfer fees and salaries.
The prune juice appears to have continued flowing during Europe’s recently-closed transfer window, England in particular recording its highest valued winter season (£215 million / HK$2 billion) for player sales since 2011. However, for many English football fans this January seemed underwhelming and, well, something of a non-event.
One reason for this may be that two players alone accounted for 37 per cent of total sales value. Brazilian Oscar left Chelsea for €60 million (HK$501 million), while Watford’s Nigerian player Odion Ighalo was transferred for £20 million (HK$193 million). Significantly, the destinations for both players were Chinese clubs: Shanghai SIPG (city population 14.4 million) and Changchun Yatai (city population 3.2 million) respectively.
While the Chinese Super League’s (CSL) clubs continued their player spending spree, the start of 2017 saw European clubs being rather more restrained in their transfer window acquisitions. Over the last 12 months, transfer values and player wages have rapidly inflated as a result of China’s avaricious pursuit of the world’s best footballing talent. January therefore seemed to be marked by European clubs stepping back from the inflationary spiral.
Observers have repeatedly warned that China’s football bubble will eventually burst, although recent interventions in football by the Chinese government have not brought any immediately radical changes in direction. Indeed, as Westerners have waited to hear the bubble pop, Ighalo’s transfer rather suggests it could still be inflating – one goal this season and none in the last 15 games from the forward hardly seems to warrant a £20 million transfer.
Critics will surely retort that Changchun’s signing of Ighalo is further evidence of the unnecessarily lavish spending in Chinese football. However, this is a somewhat ironic Western view as, also during the transfer window, a Republic of Ireland player (Robbie Brady) left a provincial club in the English Championship (Norwich, population 231,000) for £13 million (HK$125 million) to go to a Premier League club (Burnley, population 73,000). Presumably this was just as baffling to many Chinese people as Ighalo’s move to Changchun was for Westerners.
There is no doubt that Western narratives about China, not least in football, are sometimes dismissively arrogant, naive, and ill-informed. That said, if players like Ighalo are inclined to head to sub-provincial cities hundreds of miles away from China’s eastern hotspots of Beijing, Shanghai and Guangzhou, it does continue to raise some significant issues – not least pertaining to the mythology that now surrounds Chinese football.
For instance, if Odion Ighalo is worth £20 million, then there are grounds for remaining sceptical about some of the financial values we have been witnessing in Chinese football. One view is that player transfer values and salaries have been artificially inflated by China. Yet this is not just evident in player transfers, but also in other areas of football too.
In recent weeks, Beijing Guo’an went from being a perennially underachieving CSL club to being one of the world’s most valuable clubs. Previously owned by Citic (a Chinese conglomerate which is believed to have strong connections with the state), a 64 per cent stake in ‘The Imperial Guards’ was acquired by Beijing-based property developer Sinobo Land. This has valued the club at US$800 million, which approximates to the value of Italian giant AC Milan.
The investment from Sinobo has instantly propelled the Chinese club to the upper reaches of world football’s rich lists. The question of whether or not the valuation is justified will need to sit alongside similar conundrums, such as: is a Watford cast-off worth £20 million? A question remains though about whether the inflation of values is accidental or deliberate.
One argument is that China is deliberately over-valuing both players and clubs to undermine their competitive rivals, in two ways. As Fortune observes of China in world politics, “[the country] divides and weakens rivals by appealing to their greed”. This is certainly true in football as well, as many of the players recently moved to China were also thought to be considering European clubs as their next destinations.
This has prompted both Chelsea manager Antonio Conte and Arsenal boss Arsene Wenger to issue warnings about the threats to the English Premier League posed by Chinese football.
But there is a second way the CSL is undermining football elsewhere. Indeed, this piece is an example of it: after years of talking and writing about La Liga and Serie A, many football commentators are now equally as focused on China. This is incredibly helpful for Brand China and the country’s soft power narrative.
For the next few weeks, Brand China will be scoring more of these soft power open goals, because while the sterile European transfer window is now shut, China’s does not close until the end of February. This means there is more time yet for China to work at further eroding football’s traditional industrial heartlands, both by appealing to peoples’ greed and by thrusting itself centre-stage in global media coverage of football transfers and its ambitious sports policies.
This piece is published in partnership with Policy Forum.net (www.policyforum.net), an academic blog on Asia and the Pacific public policy, based at the ANU Crawford School.