Look at the fall of Evergrande, think of the future of Vietnam's football

Guangzhou F.C., once known as Guangzhou Evergrande, bore the namesake of the company that financed and gave the club enormous power in the football (or American word "soccer") world. Now, it is on the verge of dissolution, as the team's owner is in a financial crisis. The Chinese Football Association began an attempt to fix the messes, but it was too late.

It was a shocking blow for a country that back in the late 1990s to early 2010s, was among one of Asia's most elite football nations. One of the main reasons that helped China to get such a powerful status was the very large Super League, where Chinese clubs got their backs from powerful business people. Like a high-speed locomotive train, China's rise in economic terms is drawn largely from these conglomerates. Now, the national league is facing a tremendous crisis. Over sixteen clubs from China's top three divisions had already gone. The impact also made its way to the national team: Team Dragon, the nickname of the Chinese football team, has been struggling to recover its glorious past.

The potential downfall of China's Evergrande has left a really huge power vacuum that is not easy to solve. As economists across the world have been debating the impact of Evergrande's potential collapse, I'll focus only on the football aspect, and what can Vietnamese investors learn from it.

An oversized Super League

Back in the late 1990s, China was emerging as a new Asian football power, as it had almost qualified for the 1998 FIFA World Cup in France. Still, China did not have a league that was comparable to its growth.

The highest level of the Chinese football pyramid was the Jia-A League, operated with 8, later 12 teams. The Jia-A League was marred with corruption and nepotism, yet it somehow reflected the desire of Chinese players to make its football better. With the demand for professionalism increased, the Jia-A League transformed to the status in 1994, but past problems kept plaguing Chinese football.

Things changed in 2001 when the national team beat Oman 1-0 in Wulihe Stadium in Dalian, marking China's first, and only, World Cup to date. Fans were celebrating across the country as China had a historic World Cup appearance. The Chinese Football Association realised the rapid development meant it must have a better, higher quality domestic competition. And so, a project was underlined, by then-Vice President of CFA, Yan Shiduo.

Vice President Yan Shiduo of CFA during the early 2000s.

Yan wanted China to become a more formidable football force, a new league must be founded to show the might of China. In 2002, the year China took part in its only World Cup, the CFA officially sanctioned the establishment of the new domestic competition, the Super League - with the aims to create fair commercial methods, professional marketing and minimum criteria to strengthen the league. Yan was forced to step down in 2005 amidst controversies over China's failed attempt to qualify for the 2006 FIFA World Cup.

Of course, the league, like any newly infant league, notably the Australian A-League (started its maiden season the same year with Chinese Super League), began with difficulties. Beginning in 2004, Super League remained affected by the shadow of its predecessor's corrupt past. Nonetheless, it was only exposed in 2009, resulting in a large crackdown in 2010, following the arrests of many influential figures of China's football system. The crackdown was a success, as it improved the status of the Chinese Super League, once beset by instabilities. So much that everyone expected the Chinese Super League would regain its cleanliness and began to be better.

Well, however, the difference is, though I did mention A-League having a similar start like the larger Chinese counterpart, the two have later developed with contrasting methods. I'd pay attention to China's Super League to understand why.

In 2009, Xu Jiayin, owner of Evergrande Group, then a major force in estate development, bought a second-tier team, Guangzhou F.C., and renamed it Guangzhou Evergrande. It was when he began to develop a totally new approach: blow everything up. He shocked the world by signing former Argentine youth international Darío Conca with a salary only behind Cristiano Ronaldo and Lionel Messi, $12.5 million, in 2011.

Darío Conca with Guangzhou during his heyday.

It was enough to speak the road China headed for. It became increasingly clear when Xi Jinping assumed power in 2012. Xi Jinping, the most powerful autocrat, is also an ardent lover of football. Undoubtedly, when Xi Jinping called for enterprises across the country to invest more in football, they did. Chinese businessmen began pouring billions to invest foreign superstars to the Super League. Conglomerates followed Evergrande's suit, with Wanda, Suning, SIPG, Tianhai, etc. All of them sought to impress the grand goal of Xi Jinping: to host, qualify and win the World Cup.

Chinese businessmen worked exclusively and even built bridges with big European football leagues to finance their ambitions. Many of them were strongly connected with the clubs at home. Huge amounts of money were spent to bring red carpets for not just only superb players but even superb coaches. Various clubs in Europe had been under the control of Chinese tycoons, notably A.C. Milan, Inter Milan or Espanyol and Wolverhampton. Chinese players were allowed to take paths of education in Europe with relatively lower fees in contrast to their fellow European footballers, who have to fight for a place on the stage with tremendous difficulties.

Xu Jiayin also led another similar campaign: to naturalised foreigners when it is necessary to gain the win. He was instrumental in naturalising Brazilians like Elkeson, Aloísio, Alan Carvalho and Englishman Tyias Browning - the latter has Chinese origins. Suddenly, Nico Yennaris, John Hou Sæter, etc, got naturalised as the Chinese government relaxed the nationality law to serve its football ambitions.

More recently, Xu Jiayin even announced that he would build the largest football stadium in the world, a 200,000 spectator stadium in the city of Guangzhou, and construction began in 2019, serving for the upcoming 2023 AFC Asian Cup to be hosted in his country. Previously, also the same man that built what would be the world's largest football school. Eventually, more investors started pouring billions also to do the same as Mr Xu did, including new football schools across the nation.

No one questioned that. Guangzhou F.C.'s two Asian Champions League titles further cemented the club's popularity and Evergrande's credibility soared as well.

The strategy proved to be working as more and more stars came to receive fame in China - until it didn't.

By 2015, when the Super League was at its height, some of the first signs of cracks appeared, with the dissolution of Chengdu Blades due to debt. At the time, it was not an issue and so not many investors in China cared about it. But the cracks accelerated when Yanbian Funde, a Korean-based club in China funded by Funde Holdings, went bankrupt in 2018 due to taxes, leaving it dissolved in 2019, ending its 64-year old history. When Yanbian Funde collapsed, the CFA started to realise a greater problem was underlying within the Super League: many Chinese clubs were actually ghosts. To combat the situation, the CFA authorised a structural reform. In late 2020, as the COVID-19 pandemic ravaged the world, CFA announced salary cap requirements, thus limiting the wages of many foreign footballers, leaving some to vacate away from China. Then, in January 2021, CFA demanded all clubs adhere to the newly introduced neutral name requirements, which mean these clubs must no longer bear the name of their corporates. In addition, Xi Jinping also reigned in one of China's largest crackdowns on powerful conglomerates.

By the time the new laws got introduced, many Chinese clubs were in shocking dismal shape due to the coronavirus pandemic. Then, one club suffered a tragic end.

Jiangsu Suning celebrated its first CSL win in 2020.

Jiangsu Suning, owned by Suning Holdings corporation, won the CSL in 2020 after beating the Evergrande team in the final, it was the club's first-ever domestic title. Founded in 1958, it turned pro in 1994 and when acquired by Suning, it became China's fastest-growing club. But in 2020, the club's mountain of debt increased and Suning found it hard to stay as Xi's campaign was more and more brutal from times. To save face, Suning decided to stick with Inter Milan rather than the Jiangsu club.

Many Jiangsu players also expressed their concerns due to liabilities within the club, but it reached a melting point when many footballers here were reported to have not received wages for months. In the end, negotiations about changing owners didn't get the reward, thus the club was officially folded on 28 February 2021, with its youth and women branches deactivated too. The shocking downfall of Jiangsu F.C. after becoming the champions of China shocked the whole football authorities of China.

It was at this moment, Evergrande finally knew it was in trouble. The company that nurtured China's most successful club is already under the liabilities of more than $300 million by early 2021, resulting in a huge crisis within the conglomerate. It should be noted that Evergrande had invested heavily to a point slipping outside its original estate development programs. Now, with the situation unclear, Guangzhou F.C. was forced to sell out many of its players and even working to terminate the contract with former 2006 World Cup champions (also coach of the club), Fabio Cannavaro.

Guangzhou F.C. is facing a potential collapse that would put an end to one of China's great.

Unsurprisingly, as the club is in despair, Guangzhou F.C. was forced to send its youth team to the 2021 AFC Champions League. This was the reason why Guangzhou F.C. had a dismal performance, finishing bottom without a win or a draw in the group, previously not seen in Guangzhou F.C. astonishing record.

How did the Chinese Super League differ from A-League?

By contrast, Australia's A-League had an even harder beginning than CSL as it didn't get support from the government. Instead, the only thing Australian officials helped was Australian clubs must have unique local identities under the policy of "one city, one team", making its own finances in various ways with no interference.

Frank Lowy, then-President of Football Federation Australia, announced that the league must have at least ten clubs for the first ten years to maintain financial stability and self-sustaining efforts. That didn't mean the league would not expand; in fact, Lowy was interested in expanding the league - but only if clubs knew how to sustain themselves. By recommending the clubs to learn to live alone, it gradually granted Australian clubs more time to develop. This was maintained strictly by David Gallop and now-President Chris Nikou. In 2020, the A-League was expanded to 12 teams.

Of course, Australia's path to the king of sports was not easy. Australia was not even an addicted football nation like China at the time, and its hard beginning saw three clubs dissolved (one from New Zealand). But by embracing preservation and good commercial projects, A-League survived the early hard days, and despite the COVID-19 pandemic hitting Australia hard, the twelve clubs of Down Under's 2020-21 A-League season didn't disappear.

Western Sydney Wanderers, former ACL champions in 2014.

Take Western Sydney Wanderers. It stunned the world by crowning itself champions of ACL in 2014 despite existed for just a year. By that time, people thought the club would receive huge financial investments - but in the end, WSW leadership realised only by getting itself on the right path of self-inoculation that the club could survive even under which owners. WSW didn't buy expensive, rather stick with modest players, while the necessary budget is used to develop a new group of homegrown players. Of course, WSW's results deteriorated year by year, but the financial structure of WSW was preserved. It was when the true meaning of professionalism come to mind.

Of course, Australian football quality may have no longer as the same as it was during the early 2000s as well, but the right paths allowed Australians to frequently take part in European football leagues, despite difficulties. It was the good quality of footballers, though not at the best, attributed to Australia's consistent appearance at the FIFA World Cup since 2006, despite coming to football only 16 years ago. When Australia played China in the 2022 World Cup qualifiers, despite the earlier wariness of Australia's not so successful records in recent years and questionable abilities, having been forced to play away from home, emerged victoriously 3-0 against an overconfident but ageing Chinese side. As for now, China's perpetration for upcoming WCQ games is in chaos due to the unstable domestic league and being exploited by other upcoming friendly opponents, who demanded money to play against China. Once a formidable power, now no more.

What is the future of Vietnam's football?

This may be a good question. Unfortunately, the status of Vietnamese football has drawn more similarities to China than that of Australia, leave alone trying to compete with Europe. The state of Vietnamese football has been pretty much in a dismal shape, somehow shares a lot of similarities to most Southeast Asian football leagues except for Thailand. This is why thinking about having taken part in the Final Round of the 2022 WCQ was more than luck for Vietnam. Yes, it has been viewed as a smaller version of China. Still, there are similar and contrasting aspects that made Vietnam's football future a chance to change the image.

Vietnam's domestic V-League has a long history of being embroiled in controversies.

There are tons of coincidences. Like the heyday of CSL, Vietnam's V-League is run by clubs bearing the names of corporations. It has constantly changed names to various owners and sometimes relocated elsewhere. As for the result, Vietnamese clubs proved to be incapable to manage for themselves by the majority once owners changed. So far, only a few clubs were able to handle their affairs independently, such as Hanoi F.C., the first-fully professional club that didn't bear the name of any conglomerates (and so far the only one). The state of corruption is also what haunted the V-League. Bad refereeing and gambling, which once affected CSL, is also cancer in the V-League as it frequently occurs. Moreover, the V-League is also plagued by political groups, whom many of their attempts toward the clubs are to serve for their own profits at the expense of the clubs and fans. Various club owners in Vietnam are closely associated with different groups of the Communist Party of Vietnam, a trait shared with China's issue, also under the rule of the authoritarian Communist Party. It was the political affiliation that during some of the V-League heydays in the 2000s, money flew in its commercial marketing programs to buy foreign footballers without caring about its native players, much to compare with China's one. To boost legitimacy, the V-League placed itself under the jurisdiction of Vietnam Professional Football Company, akin to CSL's Main Company.

Similarities are like this. But some traits are not found in China but common in Vietnam. The most known is, the V-League is a small league, thus the money influx could not rival China. But then, another important trait is, the investors of V-League, unlike CSL, are not that enthusiastic - many claim clubs but feed only when necessary, willing to dump clubs if they can; contradicted to the insane days of CSL when clubs were fed to depth by owners, though if not for Xi Jinping's crackdowns, these owners would be likely to keep doing so since their intention was also not different from the V-League bosses. Then, the salaries of Vietnamese players at best was only good enough to live for two or three months; Chinese players, during the height, can earn to live for even two years. Always under financial duress also sets the V-League apart from CSL since V-League teams have been forced to live like orphans rather than being treated with respect; CSL clubs meanwhile always gather the passion of the fans despite a long history of mismanagement. Adding that, unlike China's CSL which tried to conceal corruption under the mask of anti-corruption campaigns, Vietnam's V-League allowed corruption to continue unchecked, at least until the 2022 qualifiers.

These differences set it apart from CSL. Football is Vietnam's most popular sport, similar to China. But widespread corruption of the state put Vietnamese players to deal with their own clubs' abnormalities. Still, the biggest difference that is not listed above, is about the national team. Since Vietnamese players have to embattle with the inconsistency of clubs and federation, the Vietnamese players were more aware of only relying on themselves to progress - hence a greater contact to the outsiders. Chinese players, by contrast, used to be in such hardship scenarios, but the rapid rise in economic power meant the new generation of players not to experience such issues. The lack of exposure to the commons of modern Chinese players may have made the Chinese football trailing behind its ambitious project of becoming a global football power.

Vietnam's national team has a long history of experiencing difficulties.

No secret, it appeared that the determination of Vietnamese players today are rooted in their own, adding with the long, traumatic wait of the populace wanting to escape from the hardship, seeing football as their only hope to follow. It is necessary to understand that, unlike China, Vietnam's state of football has a deep past of suffering wars - throughout most of the 20th century, wars dominated Vietnam until near the end of the previous century, thus missing out the mainstream of development of football. Hence, reaching the final round is beyond the imagination of many Vietnamese.

But with such an unstable domestic competition, it is not clear who can continue the rising legacy this young team is possessing. Yes, young national team because of their ages, most players only came to 23 when the team emerged. 10-15 years is the longevity of a golden generation, which Vietnam is having. A strong domestic league can produce a capable next generation of footballers, yet the type of V-League means it is impossible unless luck arrives. The way V-League's clubs runs is really a problem - since it resembles a lot from CSL, clubs in Vietnam bear the name of their sponsors and no concrete plan was made to bring professionalism to these clubs. There are only two clubs in Vietnam where the sponsors are not included in their badges: Hanoi F.C. and Haiphong F.C. The recent 2021 ACL competitor, Viettel F.C., is recognised as the successor of Thể Công, a former military-affiliated club. Viettel is also the name of the largest telecommunication conglomerate in Vietnam, owned and controlled by the same military, making the club highly commercial rather than football, which could be seen as an insult to the predecessor. The current talented generation of Vietnam also arrived from a conglomerate-affiliated club, Hoàng Anh Gia Lai, based in the mountains of Central Highlands' Gia Lai in the south. The club is owned by the Hoàng Anh Group, though the chairman of this club, Đoàn Nguyên Đức, has shown his support for real, genuine commercial club football, more than any other V-League owners alongside Hanoi and Haiphong.

Trust me not, I'm telling the truth.

As Chinese football is on the verge of financial and structural overhauls, with a potential collapse increasingly witnessed within the very mismanaged Chinese Super League, we should remember the prophecy of Antonio Conte, the coach who guided Juventus and the Italy national team, when he saw Oscar, despite just 25, rushed to China's Super League in 2016, when CSL was on its apex,

"The Chinese market is a danger for all. Not only for Chelsea, but all the teams in the world. But I think we must concentrate on our work, not think that in China there is a lot of money and they can arrive to take the players there."

Conte's words when he was leading Chelsea was a prophecy about the financial collapse of CSL. He didn't intend to speak out in fear of the Chinese regime's possible retaliation (Xi Jinping's China has been hostile to any critics of his government's ambitions), but he was aware of the future. Now, it turned to be real: the bubble is slowly going to burst, and more than 20 clubs in China have gone forever - a real wound on Xi Jinping as he has underlined the 2050 World Cup vision and three World Cup goals.

Vietnam needs a sustainable national league, a league that where commercial is commercial, clubs are clubs, fans are fans, passions are passions. Vietnam alone has seen numerous disappearances, new establishments and merges of various football clubs, conglomerates' interference and corruption have also put football clubs in jeopardy. This generation deserves a healthy environment in the domestic games, not a money-lending locomotive without a brake. When will the Vietnamese sporting leaders concentrate on it? I don't know, but I am heavily in doubt. And the doubt is unlikely to change. Like most Vietnamese football watchers.