What is China's national sport?
I’m currently in India for a good friend’s wedding, so this week’s newsletter is shorter than usual. There are just some thoughts on nationwide sporting spectacles before the usual headline roundup. The big macro news is that state support for a list of private developers has been announced. In the past five days, share prices in private developers like Longfor (+18.5%), Sunac (+25.8%), and Country Garden (+29.9%) jumped.
It was the Cricket World Cup final on Sunday. India played Australia at the Narendra Modi Stadium in Ahmedabad. It felt like everyone was watching the final, which unfortunately the hosts lost — I was hoping for some big celebrations. The event got me thinking about whether China has an equivalent sporting bonanza. The Spring Festival Gala wracks up billions of views but isn’t about sports.
If you ask ChatGPT what China’s national sport, it will reply with table tennis. The answer is a bit more complicated — this article from The China Project offers football/soccer and basketball as potential alternatives for the country’s most popular sport. But let’s accept table tennis as a proxy for now.
Here are some viewership numbers for large sporting events in China, India, and the United States:
During the 2020 Tokyo Olympics table tennis singles finals there were about 75 million Chinese viewers.
The peak viewership in India for this year’s Cricket World Cup final was 59 million.
The most recent Super Bowl had about 115 million viewers in the US.
Of course, due to the rise of streaming and the difficulty of estimating the number of people watching a sport on a single device, it’s impossible to get precise viewership numbers and make like-for-like comparisons. But what these numbers make clear is the huge upside potential for sports viewership in China and India. Each country has roughly four times the population of the US, but fewer counted spectators for nationwide sporting events.
There are economic benefits to be gained from such spectacles. While the literature on the sporting industry’s aggregate impact on economic output is limited, in 2022 the Florida Sports Foundation released a study claiming the state’s sports industry contributed $73.7 billion to Florida’s economy for the fiscal year 2020-21. The state’s GDP for 2021 was $1.25 trillion, so that’s a significant contribution to economic output.
At the moment, India looks better positioned than China to leverage large and growing sports viewership numbers into a capitalist spectacle to rival the Super Bowl. The rapid rise of the Indian Premier League for cricket has already created a huge amount of wealth and increased India’s international influence over the game. Although China would love to have an equivalent story, it’s hard to see that happening any time soon.
A significant obstacle for China is the lack of unified national interest in one sport and a domestic league with international clout. Based on personal observations, the most passionate sports fanatics I’ve met in China follow the NBA, which can be a fraught geopolitical issue. And so far, the country’s push to become a football superpower has largely fallen flat.
The other challenge is CCTV’s monopoly on national television broadcasting. Without competition and commercial incentives in place, advertising on Chinese television will continue to be a fairly uninteresting affair — think liquor ads that tell you a particular brand of baijiu is… really good. Without more exciting marketing, broadening the appeal of sports beyond diehard fans will be difficult — many Americans watch the Super Bowl for the ads. But there are streaming platforms like Tencent Sports, iQiYi, and Youku that can help drive more innovative marketing campaigns.
The most likely way for China to create Super Bowl-esque sporting spectacles would be through building domestic leagues with the financial clout to compete with Europe, North America, and the Middle East. Until that happens, the market will remain compelling but fragmented.
For an interesting overview of the world’s most-watched sporting events, you can check out this article.
On to the headlines
Taiwan opposition talks deadlocked, with no signs of compromise (Reuters)
Taiwan presidential frontrunner picks former de-facto ambassador to U.S. as vice president candidate (AP)
US thwarted plot to kill Sikh separatist on American soil (FT)
Australian PM speaks out on ‘dangerous’ Chinese navy incident that injured diver (Reuters)
Ministers from Arab, Muslim countries to visit China in bid to end Gaza war (Nikkei)
Marcos tells Xi: 'I do not think anybody wants to go to war' (Nikkei)
Kishida and Xi agree to seek ways to end Fukushima wastewater spat (Nikkei)
US business elite welcomes Xi with standing ovation (FT)
Biden calls Xi 'dictator' after cautious remarks on Taiwan (Reuters)
Xi Indicates China Will Once Again Send Pandas to US Zoos (AP)
For more on APEC you can read this CSIS report.
China Drafts List of 50 Real Estate Firms Eligible for Funding (Bloomberg)
China Set to Name Zhu Hexin as Head of FX Regulator (Reuters)
China pushes state banks to accelerate funding for private property developers (FT)
Banks may resist China’s push to help developers (Reuters)
Xi Jinping warns top officials to contain political risks to avoid China’s economy, society being hit by ‘butterfly effect’ (SCMP)
China property slump deepens as Beijing mulls more stimulus (Bloomberg). Residential property sales fell 3.7% in January-October compared to the same period in 2022, a steeper fall from the 3.2% decline in the first 9 months of this year.
China’s Problem With Unfinished Homes Keeps Getting Bigger (WSJ
China Lets Officials Use Nice Hotels, Rolling Back a Xi Rule (Bloomberg) I mentioned this last week but am including another link. This is a fairly significant signal to officials that some of the strictures of the past ten years are loosening. It’s also appears to be a sign that Xi is making some compromises within the party.
Xi’s Warm Words Jar With Reality for Foreign Companies in China (Bloomberg)
Another top executive is being investigated by China’s corruption watchdog (CNN)
US dollar dominance is facing a crypto-yuan hostile takeover (FT)
Sunac China’s shares soar after property developer says debt restructuring conditions ‘satisfied’ (SCMP)
Shenzhen cuts down payments for second-home buyers (SCMP)
Alibaba shares plunged 9% after the Chinese e-commerce giant canceled its spinoff of its cloud computing unit due to US chip export restrictions on China (CNBC)
Jack Ma's family trust to sell 10 mln shares in China's Alibaba (Reuters)
Jack Ma halts plans to cut his Alibaba stake after shares in the Chinese e-commerce giant drop (CNBC)
China’s Early Stage Technology Stocks on Brink of Bull Market (Bloomberg)
McDonald’s agreed to buy back Carlyle Group’s minority stake in the partnership that runs the restaurant chain’s Chinese, Hong Kong, and Macau businesses (Bloomberg)
China Huarong Asset Management, one of China’s largest distressed debt managers, agreed to buy a 5% stake in Chinese state-owned investment company Citic for $1.7B (Bloomberg)
Microsoft is fine avoiding China as US considers national security implications, CEO says (CNBC)
China will be at the forefront of AI, Alphabet’s Pichai says (Bloomberg)
Baidu CEO warns China's rush to develop AI models risks wasting resources (Reuters)
Bahrain-based alternative asset manager Investcorp is aiming to raise up to $548M for its first PE fund denominated in the Chinese yuan (Reuters)
Applied Materials under US probe for shipment to Chinese chipmaker SMIC (Reuters)
Chinese delivery giant Meituan is exploring a potential acquisition of Delivery Hero’s Southeast Asian business (Bloomberg)
Huawei is giving Apple stiff competition in China (CNBC)
Chinese billionaire Li Shufu’s Zhejiang Geely Holding Group sold a $350M stake in Volvo Car (Bloomberg)
Shares in WuXi XDC Cayman closed 36% higher in its trading debut after the Chinese cancer drug maker’s $471M Hong Kong IPO (Bloomberg)
China’s MMG, which is controlled by state-owned China Minmetals, will acquire Cuprous Capital, the owner of a copper mine in southern Africa, in a $1.9B deal (Bloomberg)
Sunac China Holdings secured a three-year loan of up to $490M for one of its property units from government-backed asset manager Shanghai Haolong (Bloomberg)
Broadcom’s $61B acquisition of software maker VMware won conditional approval from Chinese regulators (Bloomberg)
Chinese stocks have been a US$955 billion blunder in 2023 for market forecasters (SCMP)
Thanks for reading and enjoy the rest of your week!
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