China is expected to set limits on domestic companies’ overseas investment in areas including hotels, cinemas, entertainment industries, real estate and sports clubs, according to a recent announcement released by the government.
This move follows the listing of e-commerce giant Suning by China’s state television CCTV as a company that is known to have had made risky overseas acquisitions. The Chinese company is seen as a typical “irrational” investor because of its acquisition of a majority stake in the Inter Milan football club for 270 million euros.
Over the past year, China’s football spending splurge has spread around the world, with Chinese companies buying a stake in Manchester City, alongside other football teams. Meanwhile, some issues that have arisen and garnered wide attention include large overseas acquisitions, heavy investment in transfer windows and high salaries for foreign players.
Earlier in January, China’s sports governing body vowed to cap domestic football clubs’ excessive spending on foreign players. The Chinese Football Association (CFA) also launched new rules to double the fees in buying an international player.
Proofread by William Logsdon