Chinese Super League: Has the bubble burst with transfer tax?
The Chinese Super League has gained worldwide attention, with their clubs’ collective display of financial might seemingly enabling them to attract young, overseas superstar players at will.
Oscar arrived from Chelsea for £60m, with the likes of Hulk, Alex Teixeira, Axel Witsel and Jackson Martinez also making the switch to China.
This was no retirement league with ageing players aiming for one last big pay day – these were players in their prime, who opted to leave top-flight European football.
Having lost Oscar to Shanghai SIPG in January 2017, Chelsea manager Antonio Conte claimed the CSL was a “danger for all”.
However, new rules governing overseas players appear to have dented the clubs’ buying power in their current transfer window which, unlike in Europe, closes at the end of February.
The imposition of a 100% transfer tax for overseas players – which the Chinese FA proposes to use to help the nation develop football at youth level – has led to a slowing down of clubs’ transfer activities.
Diego Costa’s mooted £64m move to Tianjin Quanjian was scuppered when the fee effectively doubled to £128m overnight because of the new tax.
So, with this new restriction in place, has the Chinese Super League’s bubble burst?
China’s football authority wants a 100% tax on loss-making clubs that sign foreign players
CSL spending slowing – but has anybody noticed?
Having been able to flex their financial power unhindered in the past, CSL clubs are not happy with the new rule. Some are keen to explore loopholes to enable them to sign top overseas players who buy out their contracts and then arrive for free.
Arsenal manager Arsene Wenger’s view is reflective of a system which appears to be taking a breather.
“They have slowed down in China and people haven’t noticed. Many people still think ‘OK we will pay these prices because if we don’t, China will buy the players for a maximum price’,” he said.
“That is gone. We have to be looking at what has happened in the past 10 months in China, and accept that they have slowed down. They are much more cautious about spending big money for European players.”
Newcastle United manager Rafael Benitez notes that Chinese clubs, hindered by the tax, “have fewer places for foreign players”.
And while he was reluctant to see Brazil international Oscar leave Stamford Bridge, Conte now appears to have softened his stance.
“If an offer arrives for a player who wants to go, who is not in our plan, he can go,” said the Italian.
The new CSL season starts in March, with reigning champions Guangzhou Evergrande Taobao looking to extend their record haul of titles to eight.
But it was perhaps Shanghai Shenhua who made many outside China take note of the CSL for the first time, when Chelsea pair Nicolas Anelka and Didier Drogba ended their time in west London to join the club. Anelka signed in January 2012 for a reported annual salary of 12m euros (£10.6m) and six months later Drogba signed up for an eye-watering £200,000 a week.
One of the reasons the league was set up was to help improve the level of football in China, a nation that has qualified for only one World Cup – in 2002 – but is desperate to return to the global stage.
Failure to qualify for Russia 2018 was not a good start, but with the continued inclusion of superstar overseas players, the hope is that the level will improve and China will be able to qualify for the 2022 World Cup in Qatar.
There is an even bolder ambition of winning the World Cup in 2050 – and that ambition comes right from the very top.
Chinese President Xi Jinping wants his nation to be ready and able to compete against the likes of Germany, France and Brazil.
To do that, he wants to have at least 20,000 training academies and 70,000 pitches by 2020, with 50 million children and adults playing the game in two years’ time, while also ensuring that pitches are readily available in the country.
‘They were substituting players after 15 minutes’ – problems emerge
The CSL, with its powerful backers, has the capability to make all that infrastructure a reality.
Ambitious Chinese club owners, whose respective business interests range from real estate, agriculture, investments, motoring and shipping among other sectors, are content to compete with each other both on and off the pitch.
As the CSL clubs enjoy close links to the state, in effect the country’s trade surplus with the world – which in 2017 was at a record $275.81bn with the United States alone – has become a very handy revenue stream for the clubs to try to tap into.
However, initial signs that all was not well with the CSL emerged when Drogba said he was not being paid.
Gambling on football – which is illegal in China – emerged in black markets and tales of bribery and corruption enraged the Chinese FA, forcing it to act.
Less than a year after he arrived in Shanghai, Drobga departed for Galatasaray via the intervention of a Fifa exemption.
Often viewed as dithering, and with the increasing number of overseas players in their top league, the Chinese FA acted in an effort to help homegrown players’ opportunities.
“The starting foreign player quota was cut from four to three per club per match,” says senior UK reporter for Xinhua news agency Wang Zijiang.
“Any team who fields foreign players must have the equivalent number of Chinese under-23 players on the pitch at the same time. This is to help improve the standard of Chinese players.
“Previously, the rule was to just have a Chinese under-23 player in the starting XI, but clubs got around that rule by substituting them as early 15 minutes into a game, which did nothing to help the young Chinese players’ fragile confidence levels.”
Still, the allure of the CSL remains strong, especially when you see the salaries on offer. Last season, £615,000 per week was paid to Carlos Tevez, £400,000 a week to Oscar, £290,000 a week to Graziano Pelle and £200,000 per week to Ramires.
Attendances at CSL matches averaged just under 24,000 in 2017 – more than the average of the Championship in England this season. Guangzhou Evergrande Taobao had the highest average club attendance at 45,587.
“The stadiums are full with a passionate fanbase really taking their clubs to heart,” said Wang.
“Orchestrated by a lead fan with a loudspeaker, flag-waving, drum-beating, banner-holding fans make for a fantastic matchday noise and what they’re watching on the pitch is a standard of game which is improving with all the investments and addition of overseas players.
“And they’re not being taken for granted either. When any hint of match-fixing or any football scandal surfaces, the attendances dip, with fans wanting the authorities to clean up the game and ensure that what they’re watching on the pitch has not been tainted.”
From ‘crazy’ to ‘under control’
One former Premier League player who has first-hand playing experience in China is Freddie Kanoute. The striker played 38 times for Beijing Guoan in the 2012-13 season, scoring 12 times.
Kanoute recalls it being “a bit crazy” early on when he arrived in Beijing, but says the nation is on the right path to realise its lofty ambitions.
“Now it seems they are trying to get things under control by regulating the transfer system and taking a more sustainable position by investing more in youth development,” said Kanoute, whose sports consultancy firm helped facilitate striker Jonathan Soriano’s move to Beijing Guoan last year for a fee of about £10m.
“Chinese players are definitely not at the level of the top leagues in Europe, but maybe equivalent to third-tier divisions in Europe – with the exception of some players who I think could play in top European leagues.
“In the future, if authorities of Chinese football take the right steps, we will definitely see more and more Chinese players coming to Europe and more international players join the CSL.”
Kanoute immersed himself in the country, learning Mandarin and “connecting” with his new environment.
However, former Manchester United and Manchester City striker Tevez has likened his time at Shanghai Shenhua last year to a “holiday”.
“First of all, one should not think it’s easy to play in China, that you’re going to be successful no matter what,” said Kanoute.
“In fact, it’s quite competitive – and on top of that you have to adapt to a team, a culture, a language. You can’t make a difference all alone. So a player who decides to go there should be motivated and be prepared to adjust, blend in to a certain extent in order to make a difference.”
Javier Mascherano’s 10m euro (£8.86m) January switch from Barcelona to Hebei China Fortune proves the CSL continues to do business at the right price. And given the new transfer tax, the 33-year-old Argentine may fit the new financial narrative from now on.
However, Cedric Bakambu’s $50m (£35.7m) switch from Villarreal to Beijing Guoan last month suggests the appetite remains for a big-money transfer. Bakambu reportedly bought out his contract with the Spanish side, although the tax implications of that deal are being scrutinised by the Chinese FA.
For some players, the allure of the riches from China come second to wanting to continue to compete at the highest level.
In 2016, Yaya Toure twice rejected offers from Shanghai SIPG and Jiangsu Suning, preferring to remain at Manchester City in pursuit of Premier League and Champions League success.
And former Italy international Antonio Cassano this week described a potential move to China as “stupid”.
Could England hold the key to China’s future?
While the CSL will persevere at home, thousands of miles away, something has been stirring on the West Midlands football scene since July 2007, and the area has become the focal point of Far East football investment.
Carson Yeung took over at Birmingham City. Nearby West Bromwich Albion – the only West Midlands side in the Premier League – later moved into Chinese hands, with Aston Villa and Wolverhampton Wanderers going the same way.
So why are we witnessing a West Midlands footballing shopping spree by billionaires from a nation where most traditional football fan allegiances tend to be towards Manchester United, Liverpool, Chelsea and Arsenal?
Villa’s owner Dr Tony Xia has grand ambitions for his team and he sees a growing of the fanbase in China leading to an eventual tie-up for Chinese players to come and train at the club.
“When we bought Villa, we made detailed planning for the club’s future commercial development and social influence, and hopefully we can use this platform to help Chinese football,” Xia told the Xinhua news agency.
That growth could benefit the CSL in the long run, while also feeding into Guangzhou Evergrande’s stated aim of not fielding a single overseas player in their team by 2020.
However you view it, the grand footballing designs of the CSL clubs and China in general continue unabated.
The Chinese FA may have stepped in to curtail the massive overseas player spend, but that seems to be a much-needed pause for breath rather than a sign of any bubble bursting.