Shanghai isn’t an AFL expansion attempt – it’s much more interesting than that

When Port Adelaide announced last year that it had struck a three year “partnership” with Chinese business, the dominant reaction was probably confusion or derision. With a game now having been played for premiership points in Shanghai, now is a good time to try to get to grips with what exactly is going on.

While expansionism is often at the forefront of the minds of many ambitious footy fans who are keen to prove that the Australian game is the best game in the world, a much simpler answer is likely afoot: soft political power and raw cash.

A brief history of the AFL in China

The AFL-China linkage hasn’t come out of thin air. The idea of connecting foreign sports with Chinese money and audiences has been around for a while. Those with a long memory may recall that in 2010, China-linked Russian company Kaspersky paid Melbourne $300k to play a preseason game in Shanghai. Woodside, a then-Fremantle sponsor who export gas to China, also came on board as a sponsor of the game.

China’s history with the game before then was minimal, with the first local amateur championship played in Beijing in 2009 – just a year before the Melbourne-Brisbane preseason game. Since the mid 1990s, local leagues and Auskick programs (with some limited AFL support) have been springing up across the country – but on a relatively small scale to other international sporting programs in China. China had the 15th strongest national team at the 2014 International Cup, a standing that has not changed much since their first entry in 2008.

The AFL has long nurtured dreams of substantive international expansion, but they’re not naïve enough to think it starts with spending a lot of money to play games in China. As best as our research shows, the AFL isn’t footing much of the bill in China, and even groups like Tourism Australia have kicked in. The South Australian Government has even contributed $250,000 for a 25-part TV show on AFL for the Chinese market. For Port Adelaide, six staff members are listed as currently working in their “China and Government Relations” division – a substantial investment commensurate with the financial gain they are obtaining from the project.

Broadly it could be said AFL ventures overseas have three interests – financial gain, intergovernmental relations, and actual expansion of the sport. Initiatives like playing games in New Zealand and drafting from the United States seem to be far more serious ventures for expanding the reach of the sport. Those things are really what international expansion means to the AFL right now, not so much Port Adelaide playing in Shanghai.

Who is Shanghai CRED?

This deal certainly isn’t an isolated or random measure for the Chinese partner, Shanghai CRED. They are a real estate company with about $3 billion AUD in assets, led by a billionaire named Gui Goujie who is described in at least one article we’ve read as “affable”. Shanghai CRED seems to be a private company that used to be a state agency. Like many business elites Gui is embedded in the government establishment. He sits on the Shanghai committee of the People’s Political Consultative Conference (CPPCC) and “has been assigned by the Chinese government a major role in linking state and private companies, and in building Chinese investments overseas.”

Make no mistake that this sort of philanthropic engagement by expansionist Chinese business interests has official blessing. Many private businesses are of course closely linked with the state in China, and the Premier of China himself attended a game with Prime Minister Malcolm Turnbull earlier this year, during an extended Australian visit.

The company has a lot of other interests in Australia and elsewhere in the western world such as New Zealand and Canada. Last year Shanghai CRED was a minority partner with Gina Rinehart’s Hancock Prospecting in a joint venture bid to take over large swathes of S. Kidman and Co. cattle group land across Australia, a move approved by the Treasurer Scott Morrison in December 2016, after earlier bids by other foreign interests were rejected. Rinehart, naturally, attended the match at Jiangwan Stadium yesterday.

The key thing to note here is that the Shanghai game happened because of sponsorship of Port Adelaide by Shanghai CRED, and other firms to a much lesser degree. The money is substantial in AFL terms – reportedly worth $6 million in new revenue so far with more expected – but a rounding error compared to a major agricultural property deal or CRED’s $3bn asset portfolio.

The AFL as subject, not object

There’s been a lot of pretty funny press around the match, rather justifiably making the AFL and its teams look like absolute rubes in over their heads. From Port’s captain Travis Boak being roundly mocked for claiming to be the first western pro sport to play for points in China…

Riiiiiiight… 🙄 https://t.co/yf3cysPFFb

— Melbourne Victory (@gomvfc) May 11, 2017

…to the truly weird spectacle of the Age’s photographer chucking a murky yellow filter over their photos, making them look smoggy…

Imagine @theage using filters to make the 'Chinese' air look dirty 😂 pic.twitter.com/DqyqwfzT6B

— Ali Soufan (@asoufan96) May 11, 2017

…to antiquated racist jokes on Fox Footy, and the reporting of the Suns bravely surviving minor flight delays, it’s all been a bit of a cringe-fest as a resolutely local sport discovers the joys of long haul international play.

The amateurishness, the ill-preparedness, the earnestness, the boorishness, all make a lot more sense when you realise that the push isn’t really being led by the AFL or its clubs, regardless of how they like to spin things. The AFL are very much the acted-upon party here, offered a bunch of free money in exchange for the chance to showcase their product and, most importantly, to build local links and a better image for Chinese businesses. We’re not used to thinking of the AFL – locally imperious and powerful – as a passive subject going along with other people’s plans, but that’s what’s happening here.

So Sunday’s game is probably not a hubristic attempt by a major sporting body in Australia to expand its game into foreign markets, and they’re not about to be smacked down by the cold hard reality of world indifference. The adventure is easy to mock, but there’s not much AFL investment and there’s little risk here. Port have made millions off this deal. They don’t really need to suddenly develop Shanghai into a Canberra or Launceston-style second home. Their financial rewards are upfront and concrete.

The game was a success when it was played without significant incident, and when the cheques cleared the bank.

Sport diplomacy to support the ‘Peaceful Rise’

This event is best read within the context of Chinese policy of smoothing a “peaceful rise” towards superpower status and everything that entails. The AFL and Port are the lucky recipient of a downpayment of goodwill and trust-building by the business interests of a huge and rising foreign power.

It is a small component of a much broader policy. The foremost example of Chinese soft power through sport is of course in the Global Game, where the state has plans for China to become very good at soccer and invest in other countries’ leagues  in order to improve its image and create a conduit for connecting with other countries’ cultures. But a parallel logic applies here, too.

China is a rising superpower, keenly aware of the potential conflicts its expansion could cause. It is interested in deepening its foreign ties to guarantee its economic interests. Part of the way to manage this rise is by establishing networks of linkages with other countries’ business, government and cultural elites in order to increase understanding, trust and reciprocal obligations. Gui and his company are an example of this; he is a business elite with political connections running a former state asset. Gui is tasked with engaging overseas in order to expand and facilitate his business and country’s investments.

This push makes perfect sense – American soft power is no doubt what China would like to emulate. Think about it. American culture is enmeshed everywhere in Australia and elsewhere around the world, and that enmeshment tends to make American business and policy interests very intelligible and more acceptable to others. We all know roughly what Americans think, what their government is like, what their culture is like. Chinese diplomats and businesses would love to achieve that sort of normalisation in the minds of others.

Initiatives like the Port Adelaide one make sense in this context. Connecting Chinese commercial interests with local sporting competitions – the logic runs – will surely increase Australian familiarity with China and make us more inclined to view Chinese economic power benignly. They hope it can make Australian governments more familiar and friendly with China, and reduce the political cost of policy concessions to Chinese interests. Ultimately, the hope is more cultural linkage would make Australian governments less likely to block future asset sales out of fear of bad publicity.

At the end of the day, we’re a football blog, not a foreign policy or business blog. All we’re really suggesting here is that we should view the Shanghai experiment through the correct lens. That is: Port were the first to spot a way to make some money from the opportunity and the AFL are a slightly bewildered and certainly eager vessel for diplomatic exchange. Meanwhile, Shanghai CRED (and perhaps the wider Chinese political machine) wants Australian trust and goodwill because they hope that will make their own interests easier to pursue. At least one major Chinese business with political links sees our most-attended sport as a tool to help with this goal.