In 2015, Chinese wholesale giant Suning went on a buying spree.
First, they bought a football club in China. They then splurged on star players and superstar managers. And they were just getting started. In 2016, they bought a majority bet in Italian football giants Inter Milan for a reported sum of £ 230 million. Subsequently, they paid a whopping £ 523 million to the English Premier League to feature their games in China from 2019 to 2022.
Six years later, they have gone wrong. The Premier League has ended the TV deal. An ‘for sale’ board has been set up at Inter Milan. Their Chinese club closed an activity last week. And several players who helped them win their first Chinese Super League title four months ago are now without a club.
If Suning’s rise as a world player were to be seen as the prime example of China’s dream of becoming a world football powerhouse, their downfall has put the country’s ambitions under the microscope.
The Jiangsu Suning story
Suning, one of China’s largest brick-and-mortar vendors, has entered football after the country’s bid for government support to become a major power at the sport. They started by taking over Jiangsu Guoxin-Sainty, a Nanjing-based club that played in the Chinese Super League. When it was taken over, the name was changed to Jiangsu Suning.
After that, in a way that has become the norm for Chinese clubs, Jiangsu spent millions to get some of the best players in the world. They lured Ramires forward from Brazil from Chelsea and made such an attractive offer to team-mate Alex Teixeira that he picked them over Liverpool. To manage these stars, Jiangsu Suning acquired a superstar manager: Fabio Capello in Italy.
This was followed by the company investing in Inter Milan and securing a Premier League broadcasting contract. And it all came together nicely for them, at least in terms of results. In November 2020, Jiangsu Suning won the Chinese Super League maiden title while Inter Milan are currently on course to win their first Italian Serie A crown from 2009-10.
However, they succeeded on the field at the same time as a troubled time off for Suning.
According to Nikkei, Suning ‘s overseas sales have been repossessed in recent years and the shoe has been destroyed by the pandemic. The report added the company’s net loss for 2020 at 3.9 billion Yuan, a strong reversal from a profit of 9.8 billion Yuan the previous year. ‘
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That prompted Suning to cut back on its non-sales ventures, including Jiangsu, which had amassed debts of about £ 67 million because of its spending on players’ salaries. However, despite asking a price of just one hundred, Suning found no buyers for the football club and finally pulled the plug last week.
Troubled times
Suning’s story is not a one-man story.
Suning wasn’t the first Chinese corporate body to go into football, nor were they the ones that spent the most money. But their behavior has raised questions about the model of Chinese football, which was basically to sign big names for big money in the hope that it would make them a strong football nation – a strategy that long considered unsustainable.
Last month, Shandong Luneng was thrown out of the Asian Champions League for unpaid salaries but Tianjin Tigers, one of China ‘s oldest clubs, is on the verge of closing its doors. shop because of China ‘s new league policy, which prohibits corporations from lending their names to football teams.
That rule change was implemented by the Chinese Football Association (CFA) in an effort to erode the clubs’ reliance on corporations for injecting cash to buy big players.
Many times, that money didn’t give you the results you wanted. For example, Shanghai Shenhua reportedly paid £ 41.5 million to Argentine striker Carlos Tevez for a season, when he played only 20 games and scored just four goals. Tevez, in an interview with TyC Sports, said his seven-month stint in China was a ‘holiday’.
To prevent such situations, the CFA introduced a ‘transfer tax’ in 2017 – a 100 per cent tax on foreign signs. This also came at a time when the Chinese government was worried about ‘capital leaving the country’, according to the Guardian. Next month, foreign players will receive a maximum of £ 2.7 million per quarter under the new rules set by the CFA.
‘Irregular investment’
It was not just the salaries of foreign players that angered the government. According to a magazine-france.org report, in 2017, the Chinese government stepped in to ban the building of clubs abroad, claiming it was ‘reckless investments’.
Till then, several Chinese corporate bodies had bought stakes in overseas football clubs, including Atletico Madrid (Wanda Corporation), Wolverhampton Wanderers (Fosun), Slavia Prague (CEFC Energy) and Inter Milan (Suning). Now, all of these investments are discounted or sold.
Breaking a bubble?
Despite all the difficulties, it is still too early to say whether the Chinese football bubble will burst. But past days are perhaps the days when Chinese clubs spent a lot of time to become a favorite destination outside of Europe for top players.
Instead, as state-owned news agency Xinhua reported, after ‘high-speed rage’ it’s time to ‘respect the laws of football, respect the laws of market, adherence to youth training and long-term employment. ”
Chinese companies are still some of the biggest supporters of the FIFA World Cup, a tournament the country aims to host in 2030. It looks like the target has now been redesigned to cater for young players. improve now until a strong team is deployed nine years later if their plans come to fruition.