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Financial Soundness and Player Development: What next for Chinese Football?

After years of lavish spending and a rocket-like growth in awareness, Chinese football is set to become more rational in the coming years.

For a number of years now, Chinese Super League (CSL) clubs have drawn a lot of attention through their activity on the transfer market and their lavish spending on international stars. Thanks to the generosity of wealthy corporate backers, Chinese teams such as Shandong Luneng, Jiangsu Suning, Shanghai SIPG, Shanghai Shenhua or Guangzhou Evergrande have now become household names beyond China’s borders through the signings of star players like Carlos Tevez, Jackson Martinez, Graziano Pellè, Ramires and Hulk. The league itself has also been amongst the most intriguing ones of the planet, as never before had a national league grown so much in so little time, both in terms of global awareness and in continental success. However, I believe that Chinese football is currently at a turning point, and that two major things are set to change in the short-term future.

In the first place, Chinese football is set to become more rational in the years to come. Despite rumours around Guangzhou Evergrande and Radja Nainggolan, it seems that the pace at which Chinese clubs sign star players for unreasonable fees is set to slow down, and that clubs will now face stricter monitoring of their finances. While the clubs’ wealthy backers are still willing to invest, the Chinese Football Association (CFA) has introduced a series of measures to incentivise its clubs to put their finances in order and curb “irrational spending” on players. In the course of last summer, as many as thirteen money-losing sides in the CSL were ordered to pay arrears at once, and earlier last year, the CFA had announced a “100% tax” on transfer fees for foreign above €6 million (RMB 45 million), in a clear attempt to deter clubs from engaging in further intensive capital expenditure in that field. Chinese clubs are therefore set to limit their spending on players, and this should in turn help struggling entities to sanitise their accounts.

The other major change that Chinese football is set to experience in the coming years is the fact that Chinese clubs will likely focus increasingly on local talent. As we know, the spectacular growth of the CSL in recent years was part of a much wider strategy to make China become a true footballing nation, with a national team capable of competing for the world cup title. To that effect, Chinese footballing entities have invested a lot of resources in player development over the past decade, and are set to carry on in the future. As a matter of fact, the protection of local academies and home-grown players is a key factor in the CFA’s choice to crack down on unreasonable transfer fees for foreign players. In consequence, Guangzhou Evergrande have become the first team to pledge to field an all-Chinese team by 2020. This should set a trend in the CSL, both because Chinese academies will likely produce more talent in the coming years and because other teams will look to home-grown talent to replace their foreign players.

Thus, it seems that Chinese football is at the dawn of an exciting new era which will see clubs consolidate their financial positions and new locally-brought up talents hitting the pitches in the Chinese Super League in the short run. In preparation for a World Cup bid, as Marcello Lippi inadvertently implied recently?

Football enthusiast, Parisian at heart, graduate business student at Fudan University and avid observer of Chinese football.

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