Rooney is in the news again with speculation over a move to China. Not playing regular football for Manchester United, it’s rumoured that his agent is looking at a big money move there. So those on the business side of football are getting to work – but it’s interesting to contrast how the way of working with Chinese clubs seems to be different to the usual European approach to transfers.
It raises the question that, if the best players and richest clubs in the most famous domestic leagues in the world need to do business a little differently in China, then the average business may need to bear that in mind also. The modus operandi for China will more than likely require a different approach than other export markets.
In the English league, the process starts with the ‘scouts’. Clubs have well developed scouting operations, several scouts are often present at most games in the top flight. For the biggest clubs, this doesn’t confine itself to the UK but to other countries in Europe and the world. It’s a process used for tracking existing players of interest over a long period of time as well as ‘discovering’ new players. Once a club is interested in aquiring a player, a formal approach may be made or agents may become involved to sound out possibilities prior to any formalities and offers might be made.
China is not the same. The process of signing players is led by agents. The agents are the ones who have built up contacts, strong contacts over many years. Chinese clubs don’t generally engage in seeking out players themselves. As Hong Kong-based player rep. Christopher Atkins reported to the BBC, when Chinese clubs ‘recruit’ for a position they need, it’s they agents who approach the clubs with recommendations for those positions.
The underlying procedure is one based on strong contacts. The Chinese agents have strong and trusted contacts with clubs built up over years. Similar to the concept of Guanxi in China, signing players it not based around the clubs interest in a particular player's merit but on the club’s need being fulfilled by known agents.
Commercial business has parallels.
In the West, many businesses know the importance of networking and connections. It’s seen as part and parcel of running a business, having good relationships with potential clients, suppliers, and ongoing customers. Enquiries are made, meetings set up. Directors and business development teams attend events to increase their contacts, to sound out partnerships, potential suppliers and customers.
In some cases it’s frowned upon – ‘It’s not what you know, but who you know’ is said with an undertone of ‘Life’s not fair’ but many in business know that having a wide and trusted network of business contacts is beneficial, both for winning business and forging partnerships.
In China, contacts are king. "Guanxi" is a Chinese word which can be roughly translated as "relationships" or "connections". This forms a vitally important part of business in China. The ease of doing business on the internet may have changed things somewhat, but not by much. Guanxi is important to inter-business operations and inter-personal connections are vital.
In the West, we meet; we talk business and get to the job in hand first. Then the winning of ‘hearts and minds’, the getting-to-know you process can continue with some security it’s not a wasted investment of time.
In contrast, Chinese guanxi means usually that relationships are cultivated first. Once the relationship is cemented more securely, then business may be done. And that is a complex world of favours, ‘keeping face’, who owes whom a favour, sharing of information.
Our own experience in China shows that deals are won when personal contacts in China exist. Deals are extremely unlikely to happen without. The process of getting-to-know-you first is time consuming but business won’t start and goes nowhere without.
Similarly, a Chinese football club is not going to make contact with an unknown European football agent. And if the Premier League with its global clout and money deals differently in China, then as a Western-based business, China’s different way of working is something which needs taking into careful consideration. It’s an inconvenient fact and some Western business leaders would prefer to stick with their trusted methods of working. But it usually means a failed or sub-par operation in China as a result.
Another parallel exists in the world of football and business in terms of regulation as far as China is concerned. The Chinese government has become directly concerned about the high transfer figures being paid and the high amounts of capital leaving the country for overseas. It is rumoured that the government will no doubt start to impose laws on how Chinese clubs can operate when purchasing overseas players, including the amounts of money they are allowed to pay.
Business regulation also changes frequently. This is highlighted by Chinese regulation online, for example. The government controls who can host within the Chinese web space and control the flow of information from outside. The rules change quickly in the digital world as to who can own what. Only recently further requirements have been introduced in terms of hoops to jump through to get a website hosted in China, requiring company representatives presentling documents in person. It's not too long ago when this was purely an online application process.
For Western business, China has huge potential far beyond the sporting sector - consumer goods, high-tech manufacturing and engineering, tourism, education, health. But doing business is different over there and you need a solid local understanding with solid local partners to ensure the best success. Generally, there are no short cuts.
Backbone IT Group opened their first overseas office in China in 2003 and have unparalleled experience in helping Western firms do business digitally in China. Contact us by clicking here.