Capital Flight from China continues

From the FT,

(…)Chinese investors have made their first foray into English football, snapping up a 13 per cent stake in Premier League leaders Manchester City just weeks after President Xi Jinping visited the club’s academy(…)

USD 400mln for a 13 percent stake in ManCity!

And why?

(…)We see unprecedented growth opportunities in both its development as an industry, being China’s most watched sport, and its inspirational role bringing people of all ages together with a shared passion(…)

You see: they are taking their “rebalancing” seriously…

Whenever I see old football pics, I cannot fail to notice how a lot of the sponsors at the time were representative for a certain bubble period. This is especially true for British clubs, as it is easier for foreigners to have a say in a club in Britain than on the continent. For instance, a lot of British top clubs in the 80ies and 90ies were sponsored by Japanese firms. With hindsight we know this was the peak and investing in the sponsors would have cost you dearly  – think Japanese electronics industry (Sony, Sharp, Panasonic etc.)…

Although I am no fan of British football, below is probably one of the most representative pics, taken somewhen around the GFC in 2008…


…you could say that AIG and Northern Rock were certainly part of a bubble industry back in the days.

So will the investment in Manchester City help diversify the Chinese economy?

Count me sceptical…

Disclosure (short CNH and short AUD)



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