Just Another Foreign Asset: Why Chinese Buy Up European Soccer Clubs

Just Another Foreign Asset: Why Chinese Buy Up European Soccer Clubs
Hulk of Brazil controls the ball during the 2014 FIFA World Cup Brazil Group A match between Cameroon and Brazil at Estadio Nacional on June 23, 2014 in Brasilia, Brazil. Photo by Stu Forster/Getty Images
Valentin Schmid
Updated:

News Analysis

Yes, China has the official goal of becoming a leading power in world soccer by 2050, according to a policy document issued in March 2015. 

As is the case with any kind of policy directive in China, this leads to overpricing and malinvestment. Why else would Shanghai SIPG pay $61.4 million for the less-than-average Brazilian player Givanildo Vieira de Sousa, also known as Hulk? Remember his non-performance at the World Cup in Brazil 2014?

To get an idea of how large a price Shanghai SIPG paid, consider the cost of the most expensive Chinese national. Zhang Linpeng, who plays for Guangzhou Evergrande Taobao, is only worth $1.3 million, according to Germany-based soccer website Transfermarkt.com.

And why else would Chinese appliance and car manufacturers buy entire European soccer clubs? It may not be just the policy directive. This may be a win-win in terms of both politics and economics for the Chinese. 

The most valuable Chinese Super League 11, all prices in euros. (Transfermarkt.com)
The most valuable Chinese Super League 11, all prices in euros. Transfermarkt.com
Valentin Schmid
Valentin Schmid
Author
Valentin Schmid is a former business editor for the Epoch Times. His areas of expertise include global macroeconomic trends and financial markets, China, and Bitcoin. Before joining the paper in 2012, he worked as a portfolio manager for BNP Paribas in Amsterdam, London, Paris, and Hong Kong.
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