Football, oil, and roads to influence

China’s football strategy is about much more than just the sport itself

Simon Chadwick

Economics and finance, Environment & energy, Trade and industry, International relations, Arts, culture & society | Asia, East Asia, The World

11 November 2016

China is aligning its football investments with a strategy to secure West Asian minerals. Its ‘One Belt, One Road’ project could have major implications for the new world order of football, Simon Chadwick writes.

Many western observers probably still believe that Europe’s top clubs remain the most coveted football targets for China and its investors, their prospective purchase somehow symbolising the country’s sporting ambitions. And there are good reasons for such beliefs, not least the profile, presence, and power that owning a leading football club can bring.

The global discourse around China and football is becoming an increasingly well-rehearsed one, as well as one with which many of us are now familiar. But is it misplaced? Could it actually be the case that China’s football strategy is neither about the sport itself nor about Europe? Indeed, could it be that Iranian Gulf Pro League clubs Tractor Sazi and Perspolis are more important to the Chinese?

In February 2016, a freight train arrived in Tehran, having travelled directly to the Iranian capital from Beijing. Its arrival was both timely and telling; following the lifting of sanctions against Iran, the country is now opening-up to the world and establishing new trading relations. Indeed, speculation is even growing about the impact this will have on the sport and football industries in Iran.

An alignment of Chinese and Iranian sporting interests would therefore seem to be one obvious outcome of strengthening relations between the two countries. Indeed, we should probably expect sponsorships, commercial deals, and even club relationships involving the two countries.

This becomes an even likelier prospect given that Iran is a more accomplished performer at World Cups than China ever has been. The East Asian giant therefore has much to learn from its smaller West Asian partner. However, this still doesn’t account for the significance of the train, which in itself is evidence of China’s growing power across Eurasia.

More on this: Beijing needs to meet its One Belt, One Road partners half way

The direct line from Beijing to Tehran is part of China’s ‘One Belt, One Road’ (OBOR) project, which is comprised of two parts: the Silk Road Economic Belt, and the Maritime Silk Road. Mirroring the ancient Silk Road routes, the project has been designed to foster trade in central Asia and to enable China to have a greater influence on international affairs. Among the countries that are part of the OBOR initiative are India, Qatar, Russia, as well as numerous others.

China has been seeking to utilise OBOR as means of securing raw materials and building the capacity of its manufacturing industries. At the same time, the country has also sought to break some established ties between countries in the region. Among China’s achievements include the construction of a gas pipeline that allowed Turkmenistan to break its dependence on Russia, and an oil pipeline running from Russia to China.

Aside from any speculation about Iranian football, we are already seeing how the sport and OBOR are becoming part of China’s broader strategic goals. The sale of a 13 per cent stake (worth £265 million) in English Premier League club Manchester City was in part motivated by mineral interests. City is still controlled by its majority owners from Abu Dhabi, but it is China’s broader relationship with the United Arab Emirates, an OBOR member, that is striking.

In 2014, China struck a major oil and gas deal with Abu Dhabi, the first of its kind, which broke the historic grip of Western oil companies on the Gulf nation. Quid pro quo: with the relationship established it is hardly surprising therefore that when President Xi visited Britain in late 2015, he headed straight for a visit to City (and not to United, which has long been rumoured to be his favourite football club).

This use of football for diplomatic purposes, specifically in relation to mineral trading, is hardly new and is increasingly being used. The likes of Russia’s Gazprom has proved to be highly adept at using a high profile portfolio of football sponsorships to further its interests. But with China gaining access via the OBOR project to multiple new markets allied to its growing focus on football, the mineral, energy and trade-driven diplomacy of international football is likely to intensify.

China-based broker of football club deals, Alexander Jarvis, has noted that, “Football is increasingly influenced by the minerals. I am sure it was a factor in the Chinese investment into City Football Group; venture capital firm Citic Capital, part of the consortium, has huge interests in the energy sector globally, while CEFC China Energy Company – which bought Czech football club Slavia Prague in 2015 – has close ties with local government in the country. We are seeing this type of activity across a range of countries, including Serbia, Russia, Kyrgyzstan, Kazakhstan and Uzbekistan, Iran and India.”

These are all OBOR nations, albeit sometimes with poorly-developed football. Even so, leaders of nations along the new Silk Road will be acutely aware of the political leverage that sport and football can provide, especially in their dealings with China.

The world will inevitably continue to focus on Wanda’s onward march through sport, Suning’s growing interests in football, and Marcello Lippi’s battle to get China to the 2018 World Cup. However, it is arguable that football’s new world order is more potently emerging in the nations through which China’s OBOR passes. Bishkek, capital of Kyrgyzstan, may not spring to mind as being a major influence on the future of football. Yet its mineral wealth and willingness to utilise sport as a means of engaging with China suggests it could be just as big an influence on China and football as La Liga and Serie A.

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One Response

  1. Ali Ahsan says:

    OBOR’s most critical component will arguably be the China-Pakistan Economic Corridor (CPEC).

    It is rather surprising to see almost zero interest in football or any sport from Chinese in Pakistan to make part of CPEC the way it has used football for other OBOR partners in Eurasia and beyond.

    Then again the Pakistan Football Federation has been in a political crisis since June 2015 due to disputed elections and all nationwide football is suspended until FIFA decides to grow a pair and intervene.

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Chadwick, Simon. 2016. "Football, Oil, And Roads To Influence - Policy Forum". Policy Forum. http://www.policyforum.net/football-oil-roads-influence/.

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