About a decade ago, Chinese President Xi Jinping had a dream: to turn China into a global football power. This ambition was quickly supported by action and funding. Chinese conglomerates have invested heavily in domestic leagues and even attracted European soccer stars. Some companies spend huge sums of money to acquire stakes in European clubs to improve the level of Chinese football.
But China’s ambitions have never been realized and it may be on the verge of total collapse.
U.S. asset manager Oaktree Capital took over Italian football club Inter Milan on Wednesday after its Chinese owner Suning Holdings failed to repay 395 million euros ($429 million) of debt in time. Suning has pledged its shares in Inter Milan as collateral.
Suning’s loss of ownership of Inter Milan is part of a mass exit of Chinese companies from European football. In 2017, major Chinese investors owned as many as 20 European clubs; by 2021, this number had dropped to just 10.
Claudio Villa – Inter Milan/Getty Images
Suning has been forced out of European football, ending a decade-long experiment into whether flashy multi-billion dollar deals for elite sport could gradually build a genuine football giant.
“Looking back, there weren’t a lot of great success stories,” said John Duerden, a long-time Asian football reporter. Chinese ownership of these European clubs has not resulted in massive investment or major victories on the pitch. Some Chinese owners have sold stakes in European professional clubs within a few years of buying them.
Nor have these huge foreign investments in elite professional football translated into domestic gains. The Chinese national team has not participated in the World Cup for more than 20 years.
Tom Byer, a football youth development consultant based in Tokyo, Japan, said that China’s entry level is “terrible” and he has extensive experience with the Chinese football system. “The biggest motivation for football is culture, and China has no culture. Most Chinese families think football is an interference with education, and they don’t want their children to play football.
“World Football Superpower”
Compared with the ambitious plans announced in the mid-2010s, Chinese football’s performance falls far behind.
In 2016, Suning acquired 70% of Inter Milan’s shares, which was one of the most eye-catching moves by a Chinese company to enter European football. In the same year, the Chinese Football Association and other organizations proposed a plan to turn China into a “world football superpower.”
Other Chinese companies, flush with cash from China’s booming economy, have bought stakes in European clubs. Dalian Wanda Group acquired a 20% stake in Spanish club Atletico Madrid in 2015 and signed a five-year naming rights agreement when Atletico Madrid moved into its new stadium in 2017.
Fans at the time were not worried that the club’s new owners were Chinese. “Nationality is secondary. As long as the results are good, fans will put those concerns aside,” Durden said.
Conglomerates have also poured money into the Chinese Super League, China’s top soccer league. In 2010, China Evergrande Group – then one of China’s largest real estate developers whose collapse a few years earlier triggered today’s real estate crisis – acquired Guangzhou Football Club. Since 2016, Evergrande has spent huge sums of money to transfer European players to China. Other owners of Chinese football clubs, including Suning, have also funded their own transfers from Europe.
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The Chinese Super League’s transfer capital was once on par with Europe’s biggest leagues. The company spent 418 million euros ($453 million) in 2016 and 543 million euros ($589 million) in 2017, according to Transfermarkt, a football website that compiles player transfer data.
But just when things were starting to take off, the authorities demanded a halt to these ambitions.
In 2017, the Chinese Football Association asked clubs to curb “irrational spending” on foreign players and limit their appearances in top teams to support local talent. Three years later in 2020, the Chinese Super League asked sponsors to remove their brand names from local clubs.
Then money got tight. Beijing’s efforts to curb excessive borrowing in the property sector have plunged Evergrande into a liquidity crunch. Government authorities took over the company’s football stadium at the end of 2021. (Evergrande already defaulted on its overseas debt at the end of the year).
Former Inter Milan owner Suning is also facing a cash shortage. The group’s stake in the Evergrande subsidiary fell in value as the parent company collapsed. E-commerce rivals such as JD.com have also put pressure on Suning’s core retail business, limiting its ability to finance the operations of its domestic club Jiangsu Suning Football Club. The club disbanded shortly before the 2021 season, having just won its first Chinese Super League championship.
Suning’s loss to Inter Milan last week has wiped out the net worth of company founder Zhang Jindong. The former billionaire’s company was worth about $6 billion when it bought Inter Milan in 2016, according to calculations by Bloomberg. Now it’s close to zero.
Suning is best known for its retail business, selling appliances in thousands of brick-and-mortar stores. The Chinese company’s fiscal year 2020 revenue was US$35.5 billion, ranking 328th wealth’2021 Global 500 List.
This is Suning’s last time on the list, with revenue falling to $10 billion in 2022.
Who owns European clubs now?
Oaktree issued a statement shortly after taking control of Inter Milan, saying its initial focus would be on ensuring “operational and financial stability.” The company plans to recruit more Italian and European members to the club’s board of directors. (When Oaktree Capital acquired it, more than half of Inter Milan’s board of directors were of Chinese descent, including the chairman.)
The United States now has a growing influence in world football. Half the teams in England’s top flight now have some degree of American ownership. Inter Milan is now the seventh club in Italy’s top flight to be owned by an American company.
Gulf countries have also begun buying clubs in Europe’s top leagues. Paris Saint-Germain, owned by Qatar Sports Investments, dominates the French league, while English club Manchester City, owned by Royal Sheikh Mansour Holdings of the United Arab Emirates, has triumphed domestically and in Europe.
Olly Scarfe—AFP/Getty Images
But some ownership stakes are disputed. Human rights activists and some politicians have criticized the takeover of Newcastle by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, as “sporting shuffling” in which football is used to cover up the country’s human rights record.
Will Chinese football become a powerful country?
The Chinese men’s football team has not performed well on the international stage. The country’s national men’s team is ranked 88th out of 210 teams, a low ranking for a country of its size. The team has only qualified for the World Cup once, in 2002.
“Most people don’t know anything about youth development,” said Bayer, who has held positions with China’s youth soccer team and Beijing Guoan Football Club.
China focuses on the elite level, while its neighbor Japan targets younger players. This “automatically increases the pool of elite players because the gap between the best and the least becomes smaller,” Beyer explains.
Japan qualified for the FIFA World Cup for the first time in 1998 and has participated in all tournaments since then. An increasing number of Japanese players are playing in Europe’s top leagues, the pinnacle of professional football. (Since Wu Lei left the Espanyol club in August 2022, there are currently no Chinese footballers in Europe’s top leagues.)
China is currently participating in the upcoming 2026 World Cup qualifiers in Canada, Mexico and the United States
Even Chinese President Xi Jinping joked about his team’s performance. According to news posted on the Thai government’s official social media account, after the Chinese team defeated Thailand in the FIFA World Cup qualifiers in November last year, the Chinese president told Thai Prime Minister Sretha Thawisin, “There are many reasons for this. A big element of luck.”
“I’m not sure about their level,” Xi said. “There are ups and downs.”
