A Chinese conglomerate loses control of its elite European soccer team, as Beijing fails to dominate the world’s favorite sport

But China’s ambitions never took off—and could be on the verge of unravelling entirely.

On Wednesday, the U.S.-based asset management firm Oaktree Capital took over the Italian soccer club Inter Milan after its Chinese owner, Suning Holding Group, failed to repay a 395 million euro ($429 million) debt in time. Suning had offered its stake in Inter Milan as collateral.

Suning losing its ownership of Inter Milan is part of a broader exodus of Chinese companies exiting European soccer. As many as 20 European clubs were owned by major Chinese investors in 2017; that had fallen to just 10 by 2021. 

Suning’s forced exit from European soccer caps a decade-long experiment as to whether flashy multi-billion dollar deals targeting elite sports could trickle down to build a true soccer-playing giant. 

“Looking back, there haven’t been many great examples of success,” says John Duerden, a long-time Asia soccer reporter. Chinese ownership of these European clubs did not result in massive investments or significant victories on the field. Several Chinese owners sold their stakes in professional European clubs within years of buying them.

Nor did these big foreign investments into elite professional soccer translate to gains at home. China’s national team has not taken part in the FIFA World Cup for over two decades.

China’s entry level is “broken,” says Tom Byer, a Tokyo, Japan-based soccer youth development consultant with experience in China’s soccer system. “The biggest driver in football is culture, and there’s no culture in China. Most Chinese families look at football as a distraction to education, and they don’t want their kids to play.”

A “world football superpower”

China’s soccer performance are a big miss compared to the ambitious plans unveiled in the mid-2010s. 

In 2016, Suning bought a 70% stake in Inter Milan in what was one of the highest-profile forays by a Chinese business into European soccer. That same year, organizations like the Chinese Football Association put forward plans to turn China into a “world football superpower.”

Other Chinese companies, flush with cash from the country’s booming economy, bought stakes in European clubs. The Dalian Wanda Group bought a 20% stake in Spanish club Atletico Madrid in 2015, and then signed a five-year naming rights deal when Atletico moved to its new stadium in 2017. Fosun International bought the English club Wolverhampton Wanderers in 2016. 

Soccer fans at the time weren’t concerned about a club’s new Chinese ownership. “Nationality is secondary. As long as the results are OK, fans tend to put those concerns aside,” Duerden said.

Conglomerates also poured money into the Chinese Super League, the country’s top domestic soccer league. In 2010, China Evergrande Group—then one of the country’s largest real estate developers, years before its collapse triggered today’s real estate crisis—bought Guangzhou FC. From 2016, Evergrande funded costly transfers of players based in Europe to China. Other owners of Chinese soccer clubs, including Suning, also funded their own transfers from Europe. 

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At one point, the CSL rivaled Europe’s biggest leagues for money spent on transfers. It spent 418 million euros ($453 million) in 2016 and 543 million euros ($589 million) in 2017, according to data from Transfermarkt, a soccer website that aggregates player transfer data. 

But just as things started to take off, authorities called time on these ambitions.

The Chinese Football Association ordered clubs to curb “irrational spending” on foreign players in 2017, as well as limit their presence in top-tier teams in order to support local talent. Three years later, in 2020, the CSL ordered sponsors to remove their brand names from local clubs.  

Then money got tight. Beijing’s drive to rein in excessive borrowing in the property sector put Evergrande in a liquidity crunch. Government authorities took over the company’s soccer stadium in late-2021. (Evergrande had defaulted on its overseas debt by the end of the year).

Former Inter Milan owner Suning also had a cash crunch. The conglomerate’s stakes in an Evergrande subsidiary sank in value as the parent company crashed. E-commerce competitors like JD.com also pressured Suning’s core retail business, constraining its ability to fund operations at its domestic club, Jiangsu Suning FC. The club disbanded ahead of the 2021 season, just after it won its first-ever CSL title. 

Suning’s loss of Inter Milan last week has erased the net worth of company founder Zhang Jindong. The one-time billionaire was worth about $6 billion when his company bought Inter Milan in 2016, according to Bloomberg calculations. It’s now close to zero. 

Suning made its name in retail, selling electronic appliances in thousands of brick-and-mortar outlets. With $35.5 billion in revenue for the 2020 financial year, the Chinese company ranked 328 on Fortune’s 2021 Global 500 list. 

That was the last time Suning made the list, as revenue dropped to $10 billion in 2022. 

Who owns Europe’s clubs now?

Oaktree, in a statement soon after it seized control of Inter Milan, said its initial focus will be to ensure “operational and financial stability.” The firm is planning to bring in more Italian and European members to the club’s board. (At the time of Oaktree’s takeover, people of Chinese origin made up more than half of Inter Milan’s board, including its president.)

The U.S. now has a bigger presence in world soccer. Half of the teams in England’s top league now have some level of U.S. ownership. And Inter Milan is now the seventh club in Italy’s top league to be owned by a U.S. firm.

Gulf states are also starting to buy clubs in Europe’s top leagues. Paris Saint-Germain, owned by Qatar Sports Investments, dominates the French league, while British club Manchester City, owned by a company controlled by United Arab Emirates royal Sheikh Mansour, is winning both domestically and in Europe. 

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But some ownership stakes are controversial. Human rights activists and some politicians have criticized the takeover of Newcastle by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, as “sportswashing,” or using soccer to help cover up the country’s human rights record.

Will China ever be good at soccer?

China’s male soccer players perform poorly on the global stage. The country’s national men’s team is ranked 88th out of 210 teams, low for a country of its population size. The team has only qualified for the FIFA World Cup once, back in 2002.

Byer, who previously held positions in Chinese soccer at the youth level nationally and at the Beijing Guoan soccer club, says that “most people have no clue about youth development.”

While China focused at the elite level, its neighbor Japan instead targeted younger players. That “automatically increases the elite player pool, because the gap between the best and least developed becomes smaller,” Byer explains. 

Japan qualified for the FIFA World Cup for the first time in 1998, but has since qualified for every competition since. More Japanese players are playing in Europe’s top leagues, the pinnacle of professional soccer. (There are currently no Chinese soccer players in Europe’s top leagues after Wu Lei left the Spanish club Espanyol in August 2022.)

China is currently competing in the qualifiers for the upcoming 2026 FIFA World Cup, to be held in Canada, Mexico and the U.S.

Even China president Xi jokes about his team’s performance. In November, after China’s team beat Thailand’s in a FIFA World Cup qualifying match, the Chinese president told Thai prime minister Sretta Thavisin that “there was a lot of luck involved,” according to a post from the Thai government’s official social media accounts. 

“I’m not so sure about their level,” Xi said. “There are ups and downs.”