Page 360 - 2018 White Paper on the Business Environment in China
P. 360
8 White Paper on the Business Environment in China
radio and TV programs, and offer subsidies for grassroots The sports market has seen an explosion in China due in
cultural workers, according to the outline (Xinhua). large part to a massive consumption of cultural activities
from a rising middle-class population. China’s presence
Sports in the sports market is no apparition. It is clear that
China’s economic boom is having a major influence on
China’s history with the modern day sports market the availability of capital that many potential investors
can be traced back to 1966 during the country’s are using to invest in building a new sports industry in
Cultural Revolution. Basketball found its popularity China (Tuchman).
rather quickly in China, and it’s estimated that more
than 18 percent of athletically engaged Chinese A national strategic policy titled “Opinions on
people play the game; however, there is no greater Accelerating the Development of Sports Industry and
indication for basketball’s popularity in China than the Promoting Sports Consumption” issued by China’s
presence of the NBA in rising sales for sports apparel. State Council on October 20, 2014 is widely cited as a
By 2017, basketball’s popularity in the world’s most milestone leading to the take-off of sports business;
populous country exploded leaving China as the largest however, there is a bigger picture behind the birth of
international market for the NBA. Superstars of the NBA this policy document. Since the current leadership
further illustrate just how important basketball is to the took office in 2012, China has entered, in President
Chinese. Stephen Curry and Kyrie Irving both came to Xi’s words, a stage of “new normal”, meaning it can no
Beijing as ambassadors for their respective footwear longer maintain the double-digit economic growth it
lines. Stephen Curry, who represents Under Armour, has once enjoyed. Faced with the enormous challenges
become the face of the apparel company. According to of economic slowdown and restructuring, the central
the company, while international sales of Under Armour government has to look to new areas of growth. Among
products account for about 15 percent of the company’s a small number of other sectors, sport was selected as
business, international sales numbers improved by 60 one of these new areas given its potential. This is the
percent in 2016. Asia-Pacific revenues also increased 60 first time that sport was recognized by the highest level
percent in the first quarter of 2017. Irving’s popularity of China’s government as an important industry sector.
in China has helped the NBA champion guard further The strategic plan predicted that Chinese sport business
Nike’s presence in China. By March 2017, Nike sales would develop into a market worth 5 trillion yuan with
totaled $8.4 billion, up 7 percent on a currency-neutral an annual gross value added (GVA) of 1.7 trillion yuan or
basis. Of that, the Nike brand accounted for $7.9 billion, roughly between 1.2 percent and 1.5 percent of national
driven primarily by the 15 percent sales growth in China. GDP by 2025. On March 16, 2015, the strategic plan was
Nike reported a growth in sales of 9.5 percent to over matched by another high profile strategic plan, namely
$1 billion. In 2016, Adidas’ sales grew by 22 percent the Overall Reform Plan to Boost the Development of
to approximately $3 billion in China. According to a Soccer in China. China’s central reform group, a core
Euromonitor study, with $28.4 billion in sales, China’s decision-making body chaired by President Xi, approved
sporting goods industry is the second biggest market the Soccer Plan. In many ways this Soccer Plan can be
in the world behind the U.S. with sales of $103.6 billion. seen as a follow-up plan to the previous Decree, as a
In terms of growth, China’s 11 percent is significantly coherent strategy to promote the development of sport
higher than the 5 percent recorded in the rest of the and industry (Liu).
world (Tuchman).
Unlike in the West, all sport governing bodies in
It is not only basketball that is having a tremendous China are quasi-governmental organizations. It is
effect on the Chinese sports market. Currently, China’s widely believed that this centralized system from the
government is implementing a wide range of reforms old planned economy era is the major obstacle to the
to support the sports industry. Within the framework of development of a free market-based sports industry
the national fitness plan, to be implemented by 2020, and professional sport. So the real key word of the
the Chinese government plans to use sports to advance Soccer Plan is “reform”. It proposed and promised that
all sectors in the country, including industry, state, and the centralized sports governing system should be
society. President Xi wants to see the construction deregulated to release the huge market potential of
of 70,000 new soccer pitches by 2020 and far more the sports industry in China. Soccer is also the most
cooperation with international associations and clubs. popular team sport, as well as one of the very few
360
radio and TV programs, and offer subsidies for grassroots The sports market has seen an explosion in China due in
cultural workers, according to the outline (Xinhua). large part to a massive consumption of cultural activities
from a rising middle-class population. China’s presence
Sports in the sports market is no apparition. It is clear that
China’s economic boom is having a major influence on
China’s history with the modern day sports market the availability of capital that many potential investors
can be traced back to 1966 during the country’s are using to invest in building a new sports industry in
Cultural Revolution. Basketball found its popularity China (Tuchman).
rather quickly in China, and it’s estimated that more
than 18 percent of athletically engaged Chinese A national strategic policy titled “Opinions on
people play the game; however, there is no greater Accelerating the Development of Sports Industry and
indication for basketball’s popularity in China than the Promoting Sports Consumption” issued by China’s
presence of the NBA in rising sales for sports apparel. State Council on October 20, 2014 is widely cited as a
By 2017, basketball’s popularity in the world’s most milestone leading to the take-off of sports business;
populous country exploded leaving China as the largest however, there is a bigger picture behind the birth of
international market for the NBA. Superstars of the NBA this policy document. Since the current leadership
further illustrate just how important basketball is to the took office in 2012, China has entered, in President
Chinese. Stephen Curry and Kyrie Irving both came to Xi’s words, a stage of “new normal”, meaning it can no
Beijing as ambassadors for their respective footwear longer maintain the double-digit economic growth it
lines. Stephen Curry, who represents Under Armour, has once enjoyed. Faced with the enormous challenges
become the face of the apparel company. According to of economic slowdown and restructuring, the central
the company, while international sales of Under Armour government has to look to new areas of growth. Among
products account for about 15 percent of the company’s a small number of other sectors, sport was selected as
business, international sales numbers improved by 60 one of these new areas given its potential. This is the
percent in 2016. Asia-Pacific revenues also increased 60 first time that sport was recognized by the highest level
percent in the first quarter of 2017. Irving’s popularity of China’s government as an important industry sector.
in China has helped the NBA champion guard further The strategic plan predicted that Chinese sport business
Nike’s presence in China. By March 2017, Nike sales would develop into a market worth 5 trillion yuan with
totaled $8.4 billion, up 7 percent on a currency-neutral an annual gross value added (GVA) of 1.7 trillion yuan or
basis. Of that, the Nike brand accounted for $7.9 billion, roughly between 1.2 percent and 1.5 percent of national
driven primarily by the 15 percent sales growth in China. GDP by 2025. On March 16, 2015, the strategic plan was
Nike reported a growth in sales of 9.5 percent to over matched by another high profile strategic plan, namely
$1 billion. In 2016, Adidas’ sales grew by 22 percent the Overall Reform Plan to Boost the Development of
to approximately $3 billion in China. According to a Soccer in China. China’s central reform group, a core
Euromonitor study, with $28.4 billion in sales, China’s decision-making body chaired by President Xi, approved
sporting goods industry is the second biggest market the Soccer Plan. In many ways this Soccer Plan can be
in the world behind the U.S. with sales of $103.6 billion. seen as a follow-up plan to the previous Decree, as a
In terms of growth, China’s 11 percent is significantly coherent strategy to promote the development of sport
higher than the 5 percent recorded in the rest of the and industry (Liu).
world (Tuchman).
Unlike in the West, all sport governing bodies in
It is not only basketball that is having a tremendous China are quasi-governmental organizations. It is
effect on the Chinese sports market. Currently, China’s widely believed that this centralized system from the
government is implementing a wide range of reforms old planned economy era is the major obstacle to the
to support the sports industry. Within the framework of development of a free market-based sports industry
the national fitness plan, to be implemented by 2020, and professional sport. So the real key word of the
the Chinese government plans to use sports to advance Soccer Plan is “reform”. It proposed and promised that
all sectors in the country, including industry, state, and the centralized sports governing system should be
society. President Xi wants to see the construction deregulated to release the huge market potential of
of 70,000 new soccer pitches by 2020 and far more the sports industry in China. Soccer is also the most
cooperation with international associations and clubs. popular team sport, as well as one of the very few
360
