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CHINA DIGEST | Legislators take stock; Beijing reins in overseas investments, NBA China signs with Weibo

China takes stock

  • Plenty of significant news emerging from China this week as the country’s top legislative and consultative bodies gather in Beijing to review the previous year and discuss priorities for the next 12 months. Chinese Premier Li Keqiang’s main focus is the economy, but he did touch on sport a few times during his lengthy opening speech. Li said that the main tasks for sports development in 2017 are to prepare for the 2022 winter Olympic Games, to drive forward mass-participation sports, competitive sports and the sports industry as a whole, and to let more people enjoy the benefits of the developing sports industry in order to boost the nation's morale.
  • Gou Zhongwen, Minister of the State General Administration of Sports and the President of the Chinese Olympic Committee, also got in on the act, saying that the sports industry will continue to push forward more reforms on his watch, such as the ones Yao Ming will pursue as the new head of the Chinese Basketball Association. Elsewhere, the Ministry of Commerce said the volume of China's outward foreign direct investment in sports and entertainment reached $3.92bn (€3.69bn) in 2016, up 188.3 per cent year-on-year, although it didn’t reveal the sports versus entertainment breakdown.

Flight of capital

  • Meanwhile, Zhou Xiaochuan, Governor of the People's Bank of China, defended the restriction on capital outflows, citing sports as one of the areas where Chinese investors have been spending heavily without actually bringing much benefit to China. As a result, he said, authorities decided a certain amount of policy guidance was necessary and effective. As if to prove that point, Spanish news website El Confidencial reports that three Chinese companies – HNA Group, Alisports and PE firm Orient Hontai Capital – have all fallen out of the running to acquire a controlling stake in Imagina, the operator of Spanish agency Mediapro, as a direct consequence of Beijing’s bid to rein in overseas investment.
  • Several high-profile entrepreneurs and celebrities also address these parliamentary sessions, with Yao Ming’s speech drawing a lot of attention as he encouraged a move away from a focus on gold medals towards a longer term outlook that places more emphasis on amateur and school sports. Meanwhile, Xu Jiayin, founder and chairman of the Evergrande real estate group, which controls China’s most successful football club, Guangzhou Evergrande, said it was only a matter of time before China produces its own Messi or Ronaldo. Xu, who is one of Chinese President Xi Jinping’s most loyal disciples when it comes to football development, also said that he expected China’s national team to make big strides over the next couple of years, mainly thanks to World Cup-winning coach Marcello Lippi, although China’s pessimistic football fans are unlikely to share that view.
  • Reading the tea leaves from these tightly-staged meetings is notoriously difficult, but what is certain is that China’s sports industry is now both a serious part of the domestic economy, as well as a growing force on the world stage. Lagardère Sports and Entertainment chief executive Andrew Georgiou’s recent comment to Reuters that the CSL “will overtake the [English] Premier League at some point” might raise some eyebrows, but his analysis that “for the last three or four years we've seen more change happen than we have in the last 20,” is probably closer to the mark.

Sportswear

  • In the sportswear sector, Chinese brands such as Anta and Li-Ning continue to progress, but the foreign brands still hold the top spots – for now. Segment leader Nike announced 16.9-per-cent growth in China earlier this year, while Adidas last week said that its China sales rose 28 per cent last year to $3.67bn, outpacing the company’s 18-per-cent sales growth globally. Meanwhile, French sports chain Decathlon said its Chinese customer base grew 34 per cent in 2016 as it opened 48 new stores in the country.

NBA China and Weibo

  • NBA China has signed a multi-year partnership with Weibo, which will see the social media platform stream game highlights and original programming, as well as other NBA events in China and behind-the-scenes access from games. It marks a return to NBA programming for Weibo’s parent company, Sina, which lost its online rights to Tencent after the tech company signed a five-year deal in 2015 worth a reported $700m.
  • Low-cost handset manufacturer Oppo has been named as the new main sponsor of India’s national cricket team in a five-year deal worth Rs10.79bn ($162m), starting from April, according to the Board of Control for Cricket in India (BCCI). Chinese smartphone makers, such as Xiaomi and Lenovo, have rushed to crack India’s market in recent years, with cricket seen as a prized property. Oppo signed a four-year global partnership deal with the ICC in December 2015, while Huawei, which has pioneered the sports sponsorship strategy among Chinese firms going global, has previously signed deals with teams in both the IPL and the Pakistan Super League. Indian media reported that the runner-up to Oppo for the BCCI’s signature was another Chinese smartphone maker, Vivi.

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