China warns soccer investors, don't break rules on capital outflows - Metro US

China warns soccer investors, don’t break rules on capital outflows

Football player Carlos Tevez holds a team shirt with Wu Xiaohui, Chairman of Shanghai Greenland Shenhua Football Club during a news conference in Shanghai, China, January 21, 2017. REUTERS/Stringer

BEIJING (Reuters) – Private Chinese investors are welcome to help develop the sports industry but must follow the country’s rules on moving capital overseas, the sports ministry said on Monday, following a splurge on foreign soccer clubs by local buyers.

Companies from China have spent heavily on foreign clubs in recent years as President Xi Jinping has called for it to develop a world-class soccer industry.

But while it says it supports its companies expanding overseas, Beijing has also been cracking down on anything it views as “illegitimate” capital outflows.

High outflows were a contributory factor behind last year’s depreciation of the yuan currency to an 8-1/2 year low against the dollar.

The latest addition to China’s soccer stable is set to be Italy’s AC Milan. Reuters reported last week that a consortium’s 740 million euro ($784 million) purchase of the Serie A club was to be finalised on March 3 after struggling to get approval from Beijing.

Also last week, a person with knowledge of plans said Chinese buyers including Amer International and CITIC Securities Co Ltd were readying a 246 million pound ($306 million) bid for English Premier League outfit Southampton.

Late last year China’s State Administration of Foreign Exchange (SAFE) said regulators would more closely check Chinese outbound investments in the sports and other sectors, as well as investments outside a company’s core business.

Monday’s sports ministry statement along similar lines was posted on the website of the General Administration of Sport of China.

Chinese ambitions for soccer have also extended to sprucing up the domestic league with a clutch of high-profile signings.

Recent imports include Argentine international striker Carlos Tevez, who joined Shanghai Shenhua from Boca Juniors at a salary that, if UK media reports are correct, makes him the highest-paid player on the planet on around $770,000 a week.

($1 = 0.9438 euros)

($1 = 0.8050 pounds)

(Reporting by Elias Glenn; editing by John Stonestreet)

More from our Sister Sites