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UNDERSTAND THE RULES OF THE GAME

What China’s Football Reform Plan means for China and the global sports industry

Published 22 July 2015 | Authored by: Alex Haffner Chi Liu

On 16 March 2015, the Chinese government released an ambitious reform plan for sport in China, with a particular focus on football. Under the current FIFA World Rankings, China is placed 77th in the world.1 The plan demonstrates the Chinese Central Government's determination to improve this ranking, including plans to make a bid to host (and win) the World Cup.

The 50-point reform plan, championed by President Xi Jinping, covers the national team, professional leagues, professional clubs and local clubs.2 The plan envisions increasing the number of football fields, creating two specialised training institutes and establishing 50,000 Chinese schools offering football training by 2025. These initiatives will be partially funded through revenues received from a newly established national football lottery (the full details of which are still to be finalised), based on Chinese football matches. Crucially, the plan also streamlines the widely-criticised governance system for football in China which some have suggested has contributed to the corruption scandals which have blighted the sport,3 separating the Chinese Football Association (CFA) from the General Administration of Sports (GAS). Other reform points include introducing new policies on broadcasting and marketing rights.

Earlier this year, Dentons and Beijing firm Dacheng (大成) announced they will be combining. Dentons 大成 hosted the first-ever Sports Law conference in China in June 2015 at the Regency Hotel in Beijing. Here, Dentons Managing Associate, Alex Haffner, discusses with 大成 Sports Law partner, Liu Chi, what the Chinese Football Reform Plan will mean, both for China and for the global football/sports community.

 

What has brought about the Chinese government's interest in Chinese football and why is the publication of the plan by the Chinese State Council so important?

As in most parts of the world, football is the most popular sport in China. Over the past 20 years, billions of Chinese sports fans have followed the ups and downs of the professional football leagues and the Chinese men’s and women's teams. Our attention is only drawn away to watch the brilliant performance of our national teams during the Olympic Games. In the FIFA world rankings, the national Chinese men's team is consistently ranked in the seventies.4 While many of the clubs operate in the red, the Chinese Super League (CSL) footballers' salaries are amongst the highest in Asia. In fact, they are ranked 15th highest in the world.5

China's performance on the football field has long been used as a benchmark for the overall sports sector in China. The turning point happened in July 2013, after the Chinese national team's 1:5 home defeat to Thailand.6 At the time, the Thai National team was ranked 142nd in the world, and was mostly comprised of its youth team players. This prompted the Chinese government, with the multiple levels of support, to accelerate its football reform efforts.

On 2 October 2014, the State Council enacted "Several Opinions on Accelerating Development of Sports Industry andPromoting Sports Consumption7 – one of the most high-level decisions involving the sporting sector ever released.

The Opinions specifically identify football, basketball and volleyball as the three key sports to lead the reform.

Key targets to be achieved before 2025 include:

  1. increasing the overall size of the sports industry to over RMB 5 trillion (around US$1 trillion) and becoming one of the driving forces to promote sustainable social and economic development of the Chinese society; and
  2. significantly increasing the amount of sport each person plays, and increasing the average exercise space to 2m2 per person.

In order to achieve these goals, the State Council has made orders to eliminate the unreasonable administrative hurdles required to host commercial and grass-roots sporting events, reform the sporting events management system, improve the governance structures of professional clubs, and promote innovative management of sports venues and facilities. The decision also encourages foreign investment into the Chinese sports industry.

The State Council clearly intends that the Football Reform Plan should set an example for reforms of other sports and the sports sector as a whole, in order to enable everyone to enjoy the benefits of the reform and to improve the wellbeing of the average Chinese person.

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About the Author

Alex Haffner

Alex Haffner

Alex is a Partner in the Commercial, Sports and IP Team at Fladgate LLP, specialising in the sports, technology and media sectors.

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Chi Liu

Chi Liu

Chi Liu is a sports and entertainment lawyer, with legal licenses in China and New York State.

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