China′s Communist Party forcing investors to pull money out of European football | Sports| German football and major international sports news | DW | 13.04.2021
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China's Communist Party forcing investors to pull money out of European football

A few years ago, China was aiming to become a major player in world football. International stars were lured to the domestic Super League and investors bought up European clubs. This is all over.

Jiangsu Suning players celebrate winning Super League

The fans of Super League champions Jiangsu Suning aren't smiling anymore

Imagine the following scenario: Borussia Dortmund win the Bundesliga and then a few months later are banished by the German Football League (DFL). Sounds unthinkable, right? 

Not so in China. There, Jiangsu Suning were still celebrating winning the championship in November when the eastern Chinese club had their license revoked. The Chinese Football Association was out to make an example of the club. 

As recently as 2014, the powers-that-be in Beijing issued an agenda aimed to make China a football superpower by 2050 — and wealthy investors quickly set out to invest in football both in China and abroad. 

"The problem is, it became clear to the Chinese government that there weren't going to be the financial returns, or the playing returns associated with making such an investment," British sports economist Simon Chadwick, who teaches at Emlyon Business School, told DW.

Aging European and South American stars such as Marek Hamsík, Carlos Tevez and Hulk were attracted to the Chinese Super League by high salaries.

Impact in Europe 

In the meantime, Beijing has made a U-turn and initiated a major decommercialization of the game there. Among other things, the professional clubs have had to remove the names of owners from club names, which is how Jiangsu Suning was unceremoniously renamed Jiangsu FC. Not surprisingly, this did not please the financier, the Suning Holding Group, one bit. It was not long after that that the license of the reigning champions was revoked. Five other clubs have also been excluded from the professional leagues. 

The issue could also have a major impact on the game in Europe. One example is Inter Milan, which is owned by the Suning Holding group, operated by the billionaire Zhang family. The Renhe Group, whose Beijing club also lost its license, owns a majority stake in English second tier club Reading.

There are also other investors who wanted to focus primarily on Europe, such as Gao Jisheng with Premier League club Southampton, Guo Guangchang at Wolverhampton Wanderers and Zhong Naixiong at Sochaux in France. 

"There was a group that was being opportunistic," Chadwick said. "Think about someone like Tony Xia at Aston Villa. Essentially, what he was trying to do was to create favor with the government by engaging in what he thought was an acceptable overseas investment." Xia resold his majority stake in Aston Villa in 2018 after the club failed to win promotion to the Premier League.

Some have already left 

In 2017, there were 20 European clubs owned by major Chinese investors, today there are just 10. The first domino to fall was Wang Jianlin, who resold his shares in Atletico Madrid. A little later, Ye Jianming, the founder of CEFC China Energy, was driven to sell off Slavia Prague. Ye is now in prison for his economic activities.

Xi Jinping

President Xi Jinping now only wants to see investment in football if it benefits China

"As you know, Jack Ma [co-founder of the Ali Baba Group] also disappeared for a while. This is a very common pattern," Chadwick explained. "If the state doesn't like something, they will step in. And very often, (the) individual involved will disappear for a short while. They will come back later, and they will say: 'I made a mistake and now I understand what it is I am supposed to be doing.'"

China's Communist Party has a clear vision of where it wants to take the country economically. In its new five-year plan, Xi Jinping's leadership called for investment to return to China and for the focus to be placed on the domestic market. 

"If you can document an investment case that would benefit the development of the Chinese football industry, it would still be allowed," said China expert Christina Boutrup, who advises the Danish government, among others.

Rumored Inter Milan sale

The Communist Party, however, has made it known that it believes the Europeans have taken advantage of the willingness of the Chinese investors to finance their football clubs without offering anything in return. 

"What China is trying to do is flex its muscles and trying to change the balance of power in the relationship between, let's say, the Premier League and China, because up until now, China for the Premier League is something like a cash cow," Chadwick said. 

There are also rumors that the remaining Chinese investors that remain either want or need to get out of European football. The Italian daily La Repubblica reported in mid-January that Suning was in talks with London-based investment firm BC Partners in search of backers for Inter Milan. Inter president Steven Zhang, who heads the Suning Holding Group, has not commented on the report and did not respond to a DW query.

Steven Zhang

Inter Milan President Steven Zhang is thought to be looking for a buyer for the Italian club

Fan frustration  

There is no question that European football will carry on despite the departure of Suning and others. However, things look a lot  bleaker when it comes to football in China, where many active fans are visibly frustrated by the government's interference. Because the football culture is still so young, they are not bothered by the fact that their clubs are backed by large corporations. They have simply grown up with these clubs, which are now being targeted. 

"We've had the five biggest ultras groups standing together to oppose (the) FA's decisions," said Joe, a fan from northern China. 

Supporters in Henan Province and elsewhere marched outside Henan Jianye Stadium to voice their displeasure.

"The fans were triggered, burning their shirts; they were rallying up in their stadiums. And some of their angriest fans went even to Beijing. They were trying to catch the president of the FA," Joe said.

The government may have underestimated the anger the decision to divest from football would cause among some fans. Meanwhile, the organizers of the protests have been visited by local police authorities to warn them not to cause public trouble. After all, in China, whether you are a billionaire club owner or an average citizen and football fan, everyone without exception is meant to bow to the will of China's state leadership.

This article was translated from German.

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