Chinese Football – From a State-Led Past to a Digital Future

Abstract

Following the 2014 announcement of Xi Jingping’s vision for China to create a domestic sport economy worth $800+ million by 2025, discussion has arisen around how this might be achieved, who the key players in this industry are, and what the broader geo-politic effects might be for China, and the rest of the World. Of particular focus has been the investment and efforts levied specifically toward football. This special issue brings together a selection of the more recent empirical and conceptual studies concerned with China and football. This initial paper is presented as a contextual precursor to the five papers representing our special issue. Collectively, these papers draw on a variety of methodologies, and consider debates around China and football from micro, meso and more macro perspectives. We believe the research presented in this issue provides a rich and diverse source of learning for researchers and practitioners interested in the nature and effect of China’s footballing vision.

Keywords:

• China
• strategy
• policy
• management
• football

1. Introduction

In 2014 Xi Jingping revealed his vision for China to create a domestic sport economy worth $800+ million by 2025. At the centre of this multifaceted mega-project with public health, economic upgrading and outward “soft power” dimensions, is the ambition to host, and ultimately win, the FIFA World Cup. Such an “imagined future” (c/f Beckert, 2016) has the ability to mobilize and direct interested economic and political actors to work toward realizing the project’s ambitions. Indeed, in the short period of time since Xi’s call to action, China’s public and private sectors have engaged in substantial programmes of football investment, from the creation of thousands of school pitches, to the acquisition of some of the world’s leading football clubs and sponsorship deals with some of the world’s leading sports properties. At the same time, the Chinese central government has not been shy to intervene in the governance of domestic football to moderate capital flows and maintain a focus on Xi’s long-term vision. In the years following the initial unveiling of Xi’s ambitious football project, further significant policy reforms were made to the governance and structure of football in China In March 2015 “China's Football Reform and Development Program” (中国足球改革与发展纲要) set out an agenda for the management of domestic league activities and member clubs. A year later in April 2016, “China's football medium and long-term development plan (2016-2050)” (中国足球中长期发展规划 (2016—2050) formalized specific aims and objectives for the next three decades. Within a year, the Chinese Super League membership rules were overhauled (年中国足球协会超级联赛规程) in an attempt to strengthen governance, tackle allegations of corruption and to nurture confidence and private investment in member clubs. Further, reacting to a sudden influx of lucratively remunerated overseas players, a “notice of rule change” concerning the fielding of players aged 23 years and under in the Chinese Super League and China League One (关于调整中超、中甲联赛U23球员出场政策的通知) was introduced to ensure competitive game time and development opportunities for young Chinese professional players. Simultaneously, measures were introduced to curb ‘capital flight’ and disincentivize the acquisition of foreign players through a series of regulatory changes to limit spending on foreign assets (关于限制高价引援的通知).

While Xi’s call to action has prompted reform locally, and action globally, it is important to remember that China’s football history extends beyond this recent proclamation. In the decade or so prior to 2014, China successfully qualified for the men’s 2002 World Cup, although the team then performed poorly. The Chinese women’s national team has proved to be a more competent performer, typically being ranked among world football’s top-20 teams. Similarly, football investments are not such a recent development, as Shanghai Shenhua’s 2012 signing of Didier Drogba and Nicolas Anelka, and the acquisition of the Guangzhou club (which was established in 1954) by the Evergrande Real Estate Corporation, have demonstrated. Further, China’s sustained economic growth over the last two decades has contributed to increased engagement with global football. As China has opened-up to the world, its rising disposable incomes, expanding middle-class, dynamic digital environment and burgeoning ecommerce sector, and the boundless appetite of Chinese fans for foreign football products, have contributed to significant market growth in the sector, attracting investment by foreign clubs, governing bodies, events and associated corporate interests from across the world.

These political, social, economic and technological complexities, coupled with renewed efforts to consolidate and develop Chinese football and China’s influence on football globally has stimulated interest amongst practitioners engaged in the international business of football, and those scholars who study it. Seeking to reflect and serve this burgeoning interest, our aim for this special issue is to curate a collection that looks beneath the surface of Chinese football and China’s influence on football internationally. This involves looking at the actors and structures that shape and inform the various polices, strategies and management practices of organizations working to realize Xi’s vision. At the same time, we sought to better understand the complexities and potential sites of conflict and contestation of developing an infant football industry at the local level, while simultaneously attempting to expand influence internationally.

2. Introducing the Collection

In the opening paper, “Doing it the Chinese way: The politically-led commercialization of professional football in China” Ma and Kurscheidt (2020) employ a macro perspective to identify the key differences in the commercialization patterns of professional football in China and other countries. Institutional analysis and organizational change processes are used to highlight how the combination of a ‘politically-led logic’ and a ‘media-driven logic’ fuses to shape the commercial trajectory of football in China. Significantly the authors acknowledge the need for stakeholders engaging in the business of football in China to be cognisant of the policy-context, with implications for strategy formation when performing forms of industry analysis.

In the second paper, which similarly adopts a macro-level perspective, Ahsan (2021) provides conceptual insight into how commercial relations implicated in and navigated through the China Pakistan Economic Corridor (CPEC) can be enhanced through the medium of football. Ahsan theorizes how the myriad of development projects in Pakistan might be enhanced and delivered through economic co-operation with China, and examines the role football plays in this development.

Shifting perspective to focus on the stakeholders investing in European football, Lee and No (2020) use China’s overseas financial direct investment (ODI) strategy to illuminate the motives and ambitions of Chinese investment in European football, including ownership of European football clubs. The study provides an explanatory framework for the activities of Chinese firms investing time and financial resources in European football. Interestingly, while firm-specific motives and political influence are important in steering the acquisition process, the authors highlight the importance of sport-specific motivations.

Maintaining an organizational focus Liu, Skinner, and Grosman (2020) use an empirically rich case-study of Guangzhou Evergrande Taobao FC to discuss business model innovation (BMI) in the context of emerging stimuli in the Chinese football ecosystem. The authors find that BMI constancy and novelty are key to club success, while acknowledging policy and investors as the two most significant ecosystem factors in terms of shaping and innovating the club’s business model. Of particular note is the revelation that in comparison to other football leagues and organizations, Chinese Super League (CSL) clubs have unique value capture structures that privilege investors rather than the clubs themselves. The paper provides a guiding framework for anticipating ecosystem change and appropriate business model adjustment, offering solutions to Chinese football clubs and other stakeholders engaging with Chinese business ecosystems.

The final paper shifts focus to a relatively overlooked actor in China’s football ecosystem – the Chinese football fan. Here, Sullivan, Zhao, Chadwick, and Gow (2021) critique the context in which Chinese football fans operate and examine the likely trajectory of development in the short-to-medium term. As with other international studies conceptualizing fans, this study establishes key attitudinal and behavioural drivers of Chinese football fans and the activities they engage it. Findings identify similarities with fandoms elsewhere in the world, but highlight several differences in the characteristics of Chinese football fans. These differences emerge from the geography, physical distance, and league structures of China’s domestic football infrastructure, resulting in, for instance, a tendency to form allegiances to more than one club and the adoption of foreign clubs to support.

3. China and Football: A Look to the Future

The latest reform package to be applied to the structure and governance of football in China, colloquially the “Chinese Football Dream”, has stimulated excitement and activity among a multitude of private business and state actors in China keen to support and act on Xi Jinping’s ambitions. The papers in this collection demonstrate how the collective efforts deployed toward the fulfilment of Xi’s plan exist within complex social, cultural and political contexts that involve relational activities at micro, meso, and macro societal levels.

Acknowledging and identifying these developments opens future research opportunities, and highlights the necessity of deepening our understanding of China’s football infrastructure and constitutive relationships and stakeholder interactions at various levels of analysis. In the following sections we use two vignettes to illustrate both the complexities intimated above and the potential for research on “Chinese football” to explore related areas of interest, including China’s global engagement, its “soft power” expansion and the increasing prominence of indigenous ‘big tech’ companies.

Indeed, the prevailing popular narrative about Chinese football is that the country is engaged in spending on players and wants to win the World Cup. Whilst such a narrative is not without substance and indeed warrants further examination, it is an oversimplification of the way in which China’s government views football. For example, in addition to the sporting benefits of successful, elite level performance, football is also seen as a policy instrument and a means through which to achieve other ends. These ends are both economic and political, and involve investment in physical and digital territories, both locally and internationally.

4. China, Africa, Stadium and Sponsors: Some Observations

4.1. Stadium Diplomacy and the African Cup of Nations

As the 2017 African Cup of Nations (ACN) started in Gabon, one could have been forgiven for switching one’s attention away from Europe’s big leagues and also from the transfer frenzy prompted by the recently re-opened Chinese player transfer window. The ACN is a showcase for the continent’s best football talent, although it inevitably causes controversy as African players based in Europe often face a choice of leaving their clubs mid-season or else missing out on playing for their countries.

There were no such problems for African players based in China, as the Chinese Super League (CSL) was not scheduled to start until after the tournament finished. That said, the CSL was hardly awash with Africa’s top talent. Unlike the growing number of Brazilian players in China, most of Africa’s best were still turning out for European sides.

Whilst the likes of George Weah at AC Milan and Didier Drogba at Chelsea have, over the years, cast African football in a positive light, China’s recent heavy investment in talent has not fully embraced African players (or, for that matter, African coaches and managers).

Off the field though, China has seemed rather more taken with Africa. The 2017 ACN was the latest in a long line of tournaments into which the East Asian giant has invested. Gabon previously hosted the ACN in 2012, when two new stadiums were constructed for the event (which was co-hosted with Equatorial Guinea).

One of Gabon’s two stadiums, in Libreville, was funded and constructed by China. In 2017, an additional two new stadiums were used (as well as the existing stadium in Libreville and another in Franceville). The two new venues were located in Oyem and Port Gentil; both were funded and constructed by China.

It was hardly surprising therefore that in December 2016, Presidents Ali Bongo of Gabon and Xi Jinping of China met one another in Beijing. The visit was marked by China’s announcement that Gabon was to become a comprehensive cooperation partner (raised from its status as a bilateral partner). Tellingly, Xi asserted that China’s “willingness to deepen cooperation [would be] based on mutual benefit.”

Football, specifically the ACN, therefore nicely joined the dots in a Gabonese/Chinese relationship that already involved the African nation sending 14.2 per cent of all its exports to its East Asian partner. Unsurprisingly, Gabon’s biggest export to China is still crude petroleum although it also sells a large quantity of manganese ore, which is widely used in Chinese iron and steel production.

China’s use of sports stadium gifting as a diplomatic and soft power tool is now long established, the country’s practices being nicely summarised by Rachel Will in her 2012 World Policy Journal article (Will, 2012). Indeed, across several ACN tournaments stadium diplomacy has been so frequently used that it is now commonplace.

For example, in 2010 in Angola, China financed and constructed all four venues at a cost of more than US$500 million. No surprise then that Angola’s top export is crude petroleum, and that China has since become the country’s biggest export market (worth US$27 billion, five times the value of exports Angola makes to the United States).

Go back a little further to Ghana 2008: four venues, two new and two renovated – all involved China, via the provision of ‘soft loans’ (loans issued at lower than market rates) to fund the near US$200 million costs. Ghana’s top export - crude petroleum (closely followed by gold). In turn, Ghana’s top export market since the late 2000s has been China.

In 2019 the ACN was supposed to be held in Cameroon, which constructed two new venues, both of these designed by China Machinery Engineering Corporation. Back in 2009, China also made soft loans of US$40 million to Cameroon enabling the country to construct the Limbe and Bafoussam Stadiums, which were also panned for use in 2019. Cameroon’s top export: of course, crude petroleum. Cameroon’s top export market.

So, what actually is the deal between China and its African partners? The ACN is a showcase football tournament, Africa’s equivalent of UEFA’s European Championship competition. As such, it attracts tops players, big sponsorship revenues and worldwide media coverage. Being able to play games in modern, state-of-the-art venues helps the likes of Gabon make a bold, confident statement, and China’s help in enabling African nations to project such an image seems generally to be welcomed by them.

In return, China subtly and carefully utilises venue construction (or modernisation) to secure, if not exclusive, then certainly preferential access to the kinds of natural resources that are essential in maintaining the strengths of Chinese industry. The apparent reciprocation involved in stadium diplomacy would also seem to enhance China’s credentials as a trusted ally, enabling the country to win friends and extend influence across the continent. China’s approach to trade in Africa is therefore markedly different to that of previous economic powers, several of which have often had a destructive influence on African nations.

However, what is increasingly apparent across Africa are white elephant stadium projects funded by China that are more a reflection of some African leaders’ personal vanity than of a lasting legacy for the nations over which they rule. And China is perpetuating this through a series of low-cost deals; US$500 million may seem like a hefty price to pay for four football stadiums. Yet the long-term value to China is likely to go way beyond this, especially as the country seems to have no particular commitment to tournament legacy once a venue is constructed.

Significantly, Cameroon’s hosting of the 2019 ACN was postponed until 2021 as a result of organisational difficulties. Instead, Cameroon will host the 2021 edition of the tournament, which means the same issues of stadium diplomacy will apply again. As a late replacement for Cameroon, Egypt stepped in to host the competition.

The created an issue for China’s strategy in Africa, not least in its pursuit of access to important natural resources. For instance, Egypt barely gets into the global top-30 of oil producing nations. As government in Beijing nevertheless sought to identify opportunities for engaging with the 2019 CAN, its actions revealed something more about how venues and events are viewed by Chinese policy makers.

4.2. Huawei and the African Cup of Nations

It’s baffling that a private company can antagonise several governments across the world whilst splitting international opinion about its motives and intentions. Yet Huawei – the Chinese telecommunications corporation – has done just that, leading Donald Trump and his administration to restrict its North American activities and to castigate and threaten countries that continue to engage with it. Many other countries take the same view.

Whether it’s a genuine security threat to the US and its allies or simply an unstoppable commercial behemoth, Huawei nevertheless made an appearance at the 2019 CAN tournament, the Chinese company beginning the rollout of its African 5 G network at the tournament in Egypt. The launch took place at the Cairo International Stadium, which hosted several key matches during the competition.

Thus, as the likes of Australia and the US were wrestling with the perceived threats posed by Huawei – especially those linked to national security – football fans in Africa were able to avail themselves of the very latest services that next-generation mobile technology provided. One wondered whether government officials in Washington DC consequently felt compelled to adopt a sudden and unprecedented interest in African soccer.

Notwithstanding the voyeuristically enticing prospect of Trump calling out the likes of Egyptian international player Mohammed Salah or Nigeria’s Alex Iwobi, the fact that Huawei was Brand China’s most visible presence at the CAN was telling. After all, as was illustrated above, Beijing has long pursued a policy of resource diplomacy in Africa, of which football – and the African Cup of Nations – have been significant beneficiaries as well as enablers.

At the Ghana tournament in 2008, matches were staged at four stadiums: two brand new and two renovated – all of which were funded by China through ‘soft loans’, which are loans issued at a rate lower than normally available through financial markets. Angola’s hosting in 2010 involved China financing and constructing all four venues at a cost of more than US $500 million. In 2017, three of the four venues used in Gabon were funded and constructed by China.

The red thread connecting these four host nations has been the natural resources each possesses. China’s policy has been to use football and stadium construction as a means to the end of gaining preferential access to them. This is referred to as ‘stadium diplomacy’, and the intention was for the 2019 ACN to follow the same game plan.

As Cameroon was stripped of its right to host the tournament, what seems clear is that China’s strategy very quickly switched from using stadiums as the basis for political, economic, and industrial engagement, to using telecommunications via what might be called, in this instance, ‘sponsorship diplomacy’.

Indeed, the tournament had an unintended benefit brought about by event management failings in Yaounde. Cameroon’s loss may well be Huawei’s gain, which in turn helped sustain China’s diplomatic march through Africa. As the US and Europe stepped back from promoting the development of digital infrastructure in Africa, so China and its corporations stepped in.

Indeed, such a move can be seen as having been part of Beijing’s quest to create a digital silk road across Africa. Somewhat fortuitously, although rather ironically, Cameroon is currently not part of this grand project whereas Egypt is.

The US has repeatedly warned African countries to guard themselves against the creep of China’s influence over its telecommunications, though without offering support, assistance, or proposals for alternative developments in digital and mobile technologies. Donald Trump’s protests over Huawei and threats it has posed therefore rang hollow in 2019. For China and football – this time through a mobile network – there was proof yet again that it often serves as the means to more strategic and political ends.

5. A Wandaful Future?

While China’s footballing ambitions are visible overseas, efforts are also well underway locally., most notably supported by China’s emerging digital business infrastructure.

Established in 2018, Wanda Sports Group (WSG) in less than two years has established a dedicated sports entity with 53 offices in 16 countries and over 1,200 employees globally at the time of writing. WSG have rapidly assembled a platform business model to support the design and deliver of events, media and marketing solutions with a simple mission “to unite people in sports and enable athletes and fans to live their passions and dreams” (Wanda Sports Group, 2020).

Through a combination of minority and majority investment in European giants such as City Football Group (minor investment) and Athletico Madrid (majority) and the acquisition of sports business firms such as ‘Infront’ – a world leading Swiss sports marketing and media agency – WSG has mobilized significant intellectual property rights, and quickly inherited established long-term relationships in sport, enabling it to deliver sports event experiences, unique content, and build digital and physical communities around sport. This model has allowed them to focus simultaneous on the consumption and performance of different sports, and creates value for a range of stakeholders including domestic and international rights owners, brands, advertisers, fans and athletes. Mobilized through expertise and specific business units specializing in “eSpectator Sports”, and their now locally reputable “Digital, Production, Sports Solutions (DPSS)” and “Mass Participation” branches WSG sits imposingly at the heart of China’s emerging sports economy, and are integral to Xi’s vision.

Similarly, Alibaba Group, most famously known as a business-to-business (B2B) e-commerce firm founded by Jack Ma, has also played a significant role in shaping the digital transformation of Chinese football. Alibaba’s original aim was to support local Chinese firms develop cross-border trade, and help “make it easy to do business”. Since the deployment of their cloud-computing system in 2017 Alibaba has transitioned from a B2B firm, toward more of a Consumer-to-Business (C2B) organization that harnesses organic consumer demand to produce business opportunities for firms small and large, local and international.

Through its “Community of Friends Model” (Cockayne, 2016), sophisticated e-commerce and cloud computing ecosystem, and the now established Alibaba Sports Group (or Alisports) Alibaba also has a central role to play in the transformation of China’s sports industry through the use of Internet-based digital technologies. Like Wanda their efforts sit at the intersection of performance and consumption, supporting football and sports business and athletic development.

Collectively these two giants of the Chinese private sector have, in the space of only a few years, created an infrastructural blueprint for Chinese football. They have covered the performance and the consumption aspect, and built this around an intricate model of experience, merchandize, ticketing and broadcast. This is a powerful ecosystem in itself, and one that permeates numerous other sectors. By tapping into popular sports culture in China, and fusing it with existing expertise in entertainment and e-commerce these two organizations are inspiring on one level, and frightfully omnipotent at another. With their services operating through digital and cloud technologies, the service infrastructure offered through Alibaba and Wanda has the efficiency and benefit of offering integrated services through a centralized platform allowing sports fans, athletes, broadcasters and advertisers to engage and transact in real-time. Potentially they will control ticketing to live events, and have a significant role to play in broadcasting locally and internationally in the future. On one level this means a better customer service experience, more engaging, memorable sports experiences for fans, and a state-of-the-art infrastructure for fans and athletes alike.

On a different level, this means one thing – data. The tools used to provide real-time service solutions also offer the luxury of real-time data capture. China’s population, and propensity toward conspicuous, experiential consumption means that organizations like Alibaba and Wanda group will have an enviable data capture opportunity that includes but goes beyond simply monetizing the data collected. Through developments in the artificial intelligence constellation, these firms have the potential to synthesize human data, and use it to refine and develop innovations in broadcasting, communications, experience design, as well as athlete and performance tracing and measurement. These present new industry opportunities, and further avenues for international business and trade.

6. Future Research

This special issue is designed to provoke discussion around some of the issues animating nascent academic and substantive interest in China and Football. Approaching the subject from a “market perspective”, rather than looking at market dyads, or being constrained by supply and demand perspectives, the papers in this special issue emphasize the contextualisation of markets and the important role of policy and formal regulation in shaping industry developments. At the same time social norms, behaviours and a historically diverse cultural context are unpacked to shed light on the drivers and ambitions of some of the most important actors in this industry.

Our gaze toward China’s future in the latter part of this editorial is designed to prompt future research into the China football ecosystem. We need empirical studies investigating the rise of China’s tech giants, and exploration of how their systems are shaping the consumption and performance landscape. This requires quantitative evaluation, and also development of empirically rich, detailed qualitative case-studies that accurately render the complex realities of this unprecedented growth and development.

Acknowledgements

The guest editors of this special issue would firstly like to thank all of the authors who have submitted to this special issue, and whom have engaged responsively and constructively with reviewers in the development of their manuscripts. We are similarly indebted to peer reviewers for their time and the constructive nature of their feedback in the preparation of this special issue.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

David Cockayne

David Cockayne (Ph.D., University of Leicester, UK) is an Associate Professor of Marketing and Sports Business in the Management School at the University of Liverpool. David is the founding Director of Studies for the University of Liverpool’s MSc in Sports Business and Management, and is a member of the School’s Executive Education team. David’s research is broadly concerned with marketing strategy, and the internationalization and marketization of Football in China.

Simon Chadwick

Simon Chadwick (Ph.D., University of Leeds, UK) is Professor of Eurasian Sport, and Director of the Centre for the Eurasian Sport Industry at Em-Lyon Business School. Simon’s work sits at the intersection of sport, business, politics and technology, specifically in the context of Eurasia. With more than 25 years-experience working in some of the world’s leading business schools, he has published extensively and has worked with some of the biggest names in sport. He is widely acknowledged as a leading commentator on contemporary issues in elite professional sport.

Jonathan Sullivan

Jonathan Sullivan (Ph.D., University of Nottingham, UK) is Associate Professor in the School of Politics and IR at the University of Nottingham. He is the former Director of the China Policy Institute and current head of Chinese Programmes at the Asia Research Institute, University of Nottingham. His research interests include all aspects of political communication in China and Taiwan.