Nearly a decade ago, Chinese President Xi Jinping had a dream: to make China a global soccer power. That ambition was quickly backed by action and money. Chinese conglomerates poured money into the domestic league and lured Europe-based soccer stars. Some even bought large stakes in European clubs in an effort to raise the standard of Chinese soccer.
But China's ambitions will never succeed and may be on the verge of total collapse.
On Wednesday, U.S.-based asset manager Oaktree Capital made the takeover of Italian soccer club Inter Milan after its Chinese owner Suning Holdings failed to repay 395 million euros ($429 million) of debt on time. Suning had put up Inter Milan shares as collateral.
Suning's loss of ownership of Inter Milan is part of a wider exodus of Chinese companies from European football: as many as 20 European clubs were owned by major Chinese investors in 2017, down to just 10 in 2021.
Claudio Villa—FC Internazionale/Getty Images
Suning's forced withdrawal from European football marks the end of a decade-long experiment to explore whether flashy multi-billion-dollar deals targeting elite sports can lead to building a true footballing giant.
“Looking back, there aren't many big success stories,” said John Duerden, a longtime Asia soccer reporter. Chinese ownership of these European clubs hasn't led to big investments or big wins in the game. Several Chinese owners sold their shares within a few years of buying European professional clubs.
And this huge foreign investment in top professional soccer has not translated into domestic benefits: the Chinese national team has not participated in the FIFA World Cup in more than 20 years.
China's entry-level soccer is “broken,” says Tom Byer, a Tokyo-based soccer youth development consultant familiar with the country's soccer system. “Soccer's biggest driver is culture, and China has no culture. Most Chinese families see soccer as a hindrance to education, so they don't want their kids to play it.”
“The world's soccer powerhouse”
China's football performance has been a major failure compared to the ambitious plans announced in the mid-2010s.
Suning's purchase of a 70 percent stake in Inter Milan in 2016 was one of the most high-profile moves by a Chinese company into European football, the same year the China Football Association and other organisations unveiled plans to make China a “global football power”.
Other Chinese companies have also used the cash flush from China's booming economy to buy stakes in European clubs: Dalian Wanda Group bought a 20% stake in Spanish club Atlético Madrid in 2015 and signed a five-year naming rights deal when the club moved to a new stadium in 2017, while Fosun International bought English club Wolverhampton Wanderers in 2016.
At the time, football fans had no concerns that the club's new owner was Chinese. “Nationality is secondary. If the results are good, fans tend to put such concerns aside,” Duerden said.
Conglomerates also pumped money into the country's top soccer league, the China Super League. In 2010, China Evergrande Group, then the country's largest property developer (several years before its collapse triggered today's property crisis), bought Guangzhou FC. Starting in 2016, Evergrande financed expensive transfers of European-based players to China. Other owners of Chinese soccer clubs, including Suning, have also funded their own transfers from Europe.
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At one time, the CSL rivaled Europe's major leagues in terms of the money it spent on transfers: 418 million euros ($453 million) in 2016 and 543 million euros ($589 million) in 2017, according to data from Transfermarkt, a soccer website that aggregates player transfer data.
But just when things were starting to get off the ground, authorities put an end to these ambitions.
In 2017, the Chinese Football Association ordered clubs to curb “unreasonable spending” on foreign players and limit their presence in the first team in a bid to support local talent. Three years later, in 2020, the CSL ordered sponsors to remove their branding from local clubs.
Then cash got tighter. Beijing's efforts to rein in excessive borrowing in the real estate sector led to a liquidity crisis for Evergrande, and authorities seized the company's soccer stadium in late 2021. (Evergrande had defaulted on its overseas debt by the end of the year.)
Suning, the former owner of Inter Milan, was also struggling with cash. The value of the conglomerate's stake in Evergrande's subsidiary fell after its parent company went bankrupt. E-commerce competitors such as JD.com also put pressure on Suning's core retail business, squeezing the operating cash of its domestic club, Jiangsu Suning FC, which was dissolved ahead of the 2021 season, shortly after winning its first CSL title.
Suning's acquisition of Inter Milan last week wiped out the net worth of its founder, Zhang Jindong. When Suning bought the club in 2016, the one-time billionaire was worth about $6 billion, according to calculations by Bloomberg. Now, his net worth is close to zero.
Suning has made a name for itself in retail, selling electronics through thousands of brick-and-mortar stores. Its 2020 sales revenue of $35.5 billion makes it the 328th largest Chinese company in the world. luck'2021 Global 500 List.
This was Suning's last appearance on the list, with revenue dropping to $10 billion in 2022.
Who currently owns European clubs?
In a statement shortly after taking control of Inter Milan, Oaktree said its initial focus was to ensure “operational and financial stability” and that it plans to bring more Italian and European nationals onto the club's board of directors. (At the time of Oaktree's acquisition, more than half of Inter Milan's board were of Chinese descent, including the chairman.)
The United States now has a major presence in world soccer: half of the teams in England's top division are now owned in some way by the United States, and Inter Milan has become the seventh club in Italy's top division to be owned by an American company.
Gulf states have also begun buying clubs in Europe's top leagues: Paris Saint-Germain, owned by Qatar Sports Investments, has dominated the French league, while the English club Manchester City, owned by a company controlled by UAE royal Sheikh Mansour, has enjoyed success both at home and in Europe.
Oli Scarfe—AFP/Getty Images
But some of the ownership has been controversial, with human rights activists and some politicians criticising the takeover of Newcastle by Saudi Arabia's sovereign wealth fund, the Public Investment Fund, as “sportswashing” – using football to cover up the country's human rights record.
Will China ever become a strong soccer team?
Chinese men's footballers have not performed well on the international stage. The country's men's national team ranks 88th out of 210 teams, low considering the country's population size, and it has only appeared in one FIFA World Cup, in 2002.
“Most people don't know anything about youth development,” said Bayer, who previously held positions at the national youth level in Chinese football and with Beijing Guoan Football Club.
While China focused on the elite level, neighbouring Japan targeted younger players, “which automatically expands the pool of elite players as it narrows the gap between the best and the least skilled,” Baier explains.
Japan first participated in the FIFA World Cup in 1998 and has participated in every tournament since. An increasing number of Japanese players are playing in the top European leagues, the highest level of professional soccer. (Since Wu Lei left Spanish club Espanyol in August 2022, there are currently no Chinese footballers playing in Europe's top leagues.)
China is currently competing in the qualifiers for the 2026 FIFA World Cup, which will be held in Canada, Mexico and the United States.
Even Chinese President Xi Jinping has joked about his country's performance. After China's win over Thailand in a FIFA World Cup qualifier in November, he told Thai Prime Minister Surendra Tavisin that “luck played a big role,” according to a post on the Thai government's official social media account.
“I don't know much about their level,” Xi said. “Sometimes they're good, sometimes they're bad.”