China has attracted the interest of the global sports market over the past decade. When Dario Conca moved to the Chinese Super League in 2011, he became the third highest-paid player in the world behind Messi and Ronaldo. This drew the attention of clubs, players, managers and agents who were dazzled by the deals on offer.
However, a series of changes to the Chinese FA rules have dramatically limited the spending power of those clubs. Whilst Oscar signed for Shanghai SIPG on a reputed $27m a year in 2017, a salary cap of $3.3m has now been imposed.
After years of excessive spending, the Chinese FA has put a stop to the ‘crazy money’ deals, believing it was damaging the country’s reputation. The huge spending on foreign players did nothing to help the Chinese national team. The Chinese President’s wish to see the country compete in and host a World Cup is behind a policy change that has seen the likes of Nico Yennaris and Tyias Browning move to China as Chinese citizens.
Currently, players cannot expect to go to China to earn multiples of their existing income. There will be more sensible recruitment in future, with a greater focus on players who will contribute to the team than those with a mega-profile. Tevez’s comment that he “was on vacation” during his spell in China no doubt angered the club and country who financed his move in 2016.
Whilst it is worth pursuing opportunities in China, it’s important to understand the challenges of doing business in such a different environment.
What is different about doing deals in China?
Quite simply, everything…
It starts with a language barrier that few can overcome. The Chinese language has over 5,000 characters, compared to the 26 letters of the alphabet, yet there are no words that translate to ‘yes’ and ‘no’ in Mandarin. The way people express themselves is very different – Chinese people will often ask questions that British people will see as too personal or too direct (especially about money), but it should be taken in the spirit intended. Be wary of working with interpreters – in an effort not to offend their boss or you, they often don’t deliver the message as intended!
Then there is a level of government influence that we may struggle to understand. Even heating is centrally controlled — the State decide when radiators can be turned on. In that context, you can see that clubs make decisions and demands with bigger-picture politics and pressures in mind. It also means that rules and regulations can change overnight.
Most significantly of all, there is a huge cultural divide.
How do you overcome these challenges?
We all know it’s important to understand and respect cultural norms. Chinese civilisation is over 3,000 years old, so they have had a long time to establish their own rules of business! If you don’t know them, work with people who do. This will make sure you (i) earn respect early on; (ii) avoid offending the other side; and (iii) don’t get taken advantage of.
Key tips for Chinese football contracts
If negotiations have gone well, you’ll find yourself flying out to China, and the pressure will be on to sign the deal ‘today’. This is the time to keep a clear head. There is no point entering into a big-money contract if you end up signing a document that can be terminated for the most minor of indiscretions.
Some key things to think about for Chinese deals specifically are:
- What language is the contract in? If it’s in Chinese and English, which one prevails? Don’t rely on the club’s translation. Get it checked yourself, and if time doesn’t allow then make sure the English version is the one that counts if there are inconsistencies.
- How are you going to be paid? There are strict restrictions on money leaving the country, so you should be clear on how any payments are being made and to which bank account. You must get advice on this before signing.
- Image rights deals can be very attractive (it often does away with the issue at 2 above) but beware…! If you are doing a deal with an entity other than the club, then this agreement is unlikely to be protected by FIFA, so if there’s a dispute, you may find it impossible to recover the money. Carry out checks into any company you contract with in China (or ask us to do it for you).
- The Chinese FA can change rules and regulations very quickly and without warning. Make sure you know of changes on the horizon and cover them off in the contract. For example, if they introduce a lower salary cap after you sign could it impact your deal? If they reduce the number of foreign players permitted in a squad, could your deal be terminated? You cannot protect against all eventualities, but you can certainly try!
China is a proud and developing nation; sport is a powerful means of exercising global influence. Therefore, you can be sure there will be plenty of opportunity in Chinese sport for years to come.
We’ve worked on many high profile transfers to China over the past ten years; we’ve acted for players; we’ve acted for Chinese clubs; and we’ve negotiated exits for players when their time in China has come to an end. We’ve also helped players give up their British passports to naturalise as Chinese citizens. We are pleased to be able to help bridge the language and cultural gap for those who wish to do business in China, so get in touch!
Found this article interesting?
Download our handy international transfers checklist.