New players expected to bring vitality to emerging market

As China aims to boost its sports industry as a new economic growth driver, observers and insiders are calling for a shift from traditional manufacturing sectors to athletic performance-related businesses that hold greater potential.

With the National Basketball Association bringing its 19th and 20th preseason games between the Los Angeles Clippers and Charlotte Hornets to China earlier last month, the enthusiasm of Chinese fans, who have been fed a healthy diet of authentic NBA action almost every summer since 2004, remains as strong as ever.

The boisterous scene of 18,000 spectators loudly cheering every slam dunk, 3-pointer or star player during the first game on Oct 11 at the packed Shenzhen Universiade Sports Center was reminiscent of a sell-out NBA playoff game at the Staples Center in Los Angeles.

The enthusiastic response from Chinese fans happened again during the second game three days later in Shanghai, where the 18,000 tickets for the game sold out within a matter of hours.

There is growing interest among Chinese fans in high-quality sporting events.

Boasting top-level tennis performances from global stars including Serbian world No 1 Novak Djokovic and 14-time Grand Slam winner Rafael Nadal of Spain, the 2015 China Open attracted a record number of spectators in its 17-year history with nearly 230,000 fans visiting the National Tennis Center during the weeklong tournament.

The record audience number as well as high media exposure also lured 12 main sponsors for the tournament, which brought in 160 million yuan ($25 million) in endorsement revenue, breaking even for the event.

The growing demand for tickets and increasing sponsor interest for elite sports events highlights China's shifting urban consumption toward leisure and recreation since the country announced an ambitious plan last October to boost the sports industry in the next decade.

The plan, which was issued by the State Council, China's Cabinet, set the goal of an industry gross value of more than 5 trillion yuan by 2025, when the industry is expected to account for about 1 percent of GDP compared with 0.6 percent in 2012.

With a growing number of domestic and international sporting events held each year, relevant businesses, including club merchandizing, onsite catering, sales of sporting goods and trading in media rights, have been booming, contributing an increasing amount to the turnover of the country's sports sector.

"Compared with overall economic growth, the sports industry has grown rapidly over the years. The consumption of intangible products, such as professional athletic performances and fitness services, has been an increasingly important driver of growth," said Tan Jianxiang, a professor of sports sociology at South China Normal University.

Free market to accelerate growth

As China aims to shift its sporting focus from winning gold medals to improving public well-being and the sports industry after the 2008 Beijing Olympics, boosting the sporting sector has become a top priority on the governmental agenda.

China's sports industry, which includes sports-competition-related consumption, fitness club operations, sporting goods manufacturing and media rights sales, was valued at 952 billion yuan at the end of 2012.

This lagged behind estimates to reach the proposed goal by 2025, according to the 2014 edition of the Annual Report on Development of the Sports Industry.

The recent governmental call to unleash the market by relinquishing administrative powers will accelerate the industry's growth, said Lin Xianpeng, a sports industry professor at Beijing Sport University.

"With the central government's decision to relinquish approval and overseeing rights for commercial and mass sporting events, more private investors and NGOs are expected to dream big in the current State-dominated sports industry, and bring vitality to the market," said Lin, who was a member of the State Council's sports policy expert panel.

sunxiaochen@chinadaily.com.cn

(China Daily European Weekly 11/13/2015 page24)