According to international business data platform Statista, the market size of China’s sports industry was close to 3 trillion yuan (US$469 billion) in 2019, continuing a trend of steady growth over previous years. The industry represented roughly three per cent of the country’s gross domestic product.
By 2025, the industry is expected to reach 5 trillion yuan, or US$782 billion in current exchange rates. This is according to the projection outlined in Circular Number 46 “Several Opinions of the State Council on Acceleration of the Development of the Sports Industry and Stimulation of the Sports-related Consumption” released by China’s State Council in October 2014.
While the Chinese Government made it clear that the guiding principle of the Circular was to improve the population’s general health—by encouraging more people to participate in sports, the capital market has since embraced the move, viewing it as a favourable policy for the sports industry. The increased market capitalisation of many of China’s leading companies in the field, often in relation to brands marketing and products manufacturing, is well-documented.
However, it must be noted that China’s sports industry is a diverse one, and as vibrant as in any other country. It does no harm for investors looking for asset valuation to be a bit more creative.