Brazilian soccer star Elkeson celebrates after scoring for Guangzhou Evergrande. Photo: AFP

This is the debut of a new sports-focused column by David Hutt. Free Flowing is a companion feature to his politically centered column Free Thoughts, which readers can follow here. – Editor

When, in 2012, Didier Drogba signed for Shanghai Shenhua for a reported US$310,000-a-week salary, fresh from having just won the Champions League with English side Chelsea, he remarked: “I hope to help promote Chinese football around the world and further improve the links between China and Africa.”

It didn’t last long. He played 11 games, scoring eight goals, but signed for Turkish side Galatasaray just six months later. 

The days of Chinese Super League (CSL) clubs in effect heaving armfuls of cash at any graying superstar who no longer wants to cut it in the European leagues (Shanghai SIPG paid $66 million in 2016 for Brazilian center-forward Hulk; Jiangsu Suning paid around $60 million for attacking midfielder Alex Teixeira the same year) are over after more stringent salary caps were introduced this month, following the first-ever cap imposed in December 2019. 

CSL clubs can now only spend 600 million yuan ($92.8 million) per year on player salaries, with up about a tenth of that on foreign talent. Domestic players can be paid a maximum of $765,000 a year, and foreign players $3.6 million.

Limits will also be introduced for the second and third tiers of Chinese soccer. Oscar, the Brazilian winger who signed for SIPG from Chelsea in 2017, is reportedly earning around $27 million a year, so roughly nine times the newly imposed salary cap on foreign players, and that was after the Shanghai side paid around $71 million for his move.  

Most reports have it that the Chinese Football Association’s reasoning is threefold. The most urgent, and most irrefutable, is to end the speculation and debt-driven bubble that have typified the Chinese game for years.

According to one report, the average annual expenditure of CLS clubs in the 2018-19 season was 1.1 billion yuan, about $170 million. “The policy aims to curb the investment bubbles in our leagues and promote the healthy and sustainable development of professional football,” the CFA statement reads.

And the CFA’s president, Chen Xuyuan, was spot on: “The CSL club expenditure is about 10 times higher than South Korea’s K-League and three times higher than Japan’s J-league. But our national team is lagging far behind. The bubbles not only affect the present of Chinese football, but also hurts its future.”

Although the Communist Party of China has made grand claims about promoting the local game for years, soccer wasn’t among the industries prioritized for post-pandemic investment, James Skinner, director of the Institute for Sport Business at Loughborough University London, told me.

By May 2020, five clubs had already gone out of business, including CSL side Tianjin Tianhai. A further 11 teams, four from the second division and seven from the third division, were disqualified for failing to pay wages to players and staff. 

“Even before [the] pandemic, CSL clubs were not financially independent. The pandemic has decreased the CSL clubs’ operating income and worsened their financial situation,” Skinner said, noting also that many CSL clubs now need additional capital injection from their investors, yet this over-reliance on investors places them in a dangerous position.

“If investors cannot provide capital or withdraw their sponsorship the CSL they will be in a very vulnerable position,” he added. 

Clearly, financial restraint is needed. But one question about the new rules is application. Punishments for breaking the rules are harsh. A team who pays over the odds on salaries could be docked between 6 and 24 points in the league, while the overpaid player won’t be able to be fielded.

“No matter how big the club is or how famous the player is, we will strictly follow the regulations with no considerations,” Chen, of the CFA, has warned. “Do not test our determination.”

But, of course, there are loopholes. It might not be possible simply to offset one player’s exorbitant salary by underpaying the rest of the team, as the new rules apply for a club’s combined expenditure on wages. But CSL clubs could instead take on more players on loan, with their home clubs paying the majority of the player’s wages and the CSL clubs repaying this in a way other than wages.  

Finances are fair enough, and they fit with the wider Communist Party policy of directing economic growth more toward sustainability. The second and third reasons for the salary-cap decision, though, are somewhat paradoxical.

The Chinese government, and therefore the Chinese FA, clearly wants to prioritize the national team. Which country doesn’t? Yet there is also politics at hand. President Xi Jinping, apparently a soccer fan, has identified it as a way for China to build its international prestige. 

The model in previous years – well, at least up until the 2019 season – was simply to throw bucketloads of money at aging foreign stars, hoping that local talent improves playing alongside them. In 2018, the CSL introduced a 100% tax on large transfer fees, so that in  any transfer costs above £5.2 million ($7.1 million) the same amount must be paid into the Chinese FA’s youth system, a sensible policy.

But if the results of the Chinese national team are a marker of success, it’s hard to find some. In the second round of qualifiers for the 2022 World Cup, China are currently on the same number of points as the Philippines. It’s doubtful if they’ll make it through the third-round qualifiers. The national side is currently ranked by FIFA at 75th in the world, between United Arab Emirates and Curaçao, a Caribbean island with a population of 160,000.

Another model has been to naturalize foreign-born players. Nicholas Harry Yennaris (now Li Ke) was born in the East London area of Leytonstone before being naturalized Chinese in 2019. There’s also Brazilian-born Elkeson (or Ai Kesen, if you prefer), who now has several caps for the Chinese national side, and Liverpool lad Tyias Browning (Jiang Guangtai). None of this appears to have done much good for the national team, though.

So, on the one hand, the more restrictive salary caps are intended to allow greater numbers of Chinese youth to come through the club ranks, ideally prompting improvements to the youth academy systems. More sustainable development alongside sustainable finances.

Yet, on the other hand, the CFA also eyes this as a way of steering Chinese players away from the domestic leagues (hence lower wages) and toward the more competent European leagues, where they can play alongside better players, in better club structures and with better coaches, before returning to play for the nation as improved athletes.

Wu Lei, a winger at Spanish side RCD Espanyol, is pretty much the only Chinese playing at a high level in Europe.

There is some logic to this, as long as you accept that it comes with downsides. The Argentine and Brazilian domestic leagues (and even the Dutch Eredivisie) are well supported and certainly interesting to watch, at least for the spectacle. But they’re not of the highest quality.

Any Argentine or Brazilian superstar worth his salt gets taped up by a European club after hitting puberty and plays the majority of his career across the Atlantic, before returning home for a season or two before retirement. That improves their national sides, as recent tournaments make clear, but it does come at the expense of their domestic leagues, which are bereft of the best, young soccer players and stodgy with famous footballers well past their prime.

Moreover, it’s only possible because Argentine and Brazilian soccer has an unstoppable conveyor-belt of young talent, something they have honed since the 1930s. A Ronaldo or Ronaldinho is sold to a Spanish side, and within a season or two the next Ronaldo or Ronaldinho is ready to be exported to Europe. That isn’t the case in China, and won’t be until their youth systems are fully developed, which could take decades.

In the reverse, the English Premiership is the most watched league in the world, with the richest clubs and the highest-paid players, and arguably the most competitive in terms of who’s able to come top each season. But the English national team hasn’t won a major tournament since 1966 (as every Englishman will intone five minutes into a conversation about football, as I have just done here).

And, in most respects, this is now an accepted trade-off: National glory is compensated by the fact that Brits have the best of world soccer on their doorstep. 

But does China want to weaken its own domestic leagues, which have the capability of becoming well respected, on the chance of improving the national side? If everything goes to plan, this isn’t a dichotomy that will have to be accepted. Finances could become sustainable; young talent will come through and play a few seasons in the CSL before leaving for a European team, then to be replaced by the next generation of soccer players. 

But in all reality, the CSL will suffer, both in terms of quality and spectator figures, if the best and brightest of Chinese talent is set up to be exported to European leagues at the earliest possible moment. Match attendances in China are already falling: by 3.1% in 2019, when average attendance in CSL games was 24,076.

Yet, last April, Guangzhou Evergrande, probably the richest side in the CSL, saw work start on their new $1.7 billion stadium, which will be the world’s largest at around 100,000 capacity when it’s finished in 2022.

But will 100,000 Cantonese show up each week to watch a team of unknown 18-year-olds – playing alongside mediocre and now relatively poorly paid, senescent foreign players – who they know will be shipped off to play in Europe within a season or two?

David Hutt is a political journalist based between the Czech Republic and Britain. Between 2014 and 2019, he was based in Cambodia, covering Southeast Asian affairs. He is Southeast Asia columnist for The Diplomat and a regular contributor to Asia Times, including the columns Free Thoughts and Free Flowing. He reports on European political affairs and Europe-Asian relations. Follow him on Twitter @davidhuttjourno.