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WTO to Bring Sports to China
China's entry into the World Trade Organization (WTO) will have a profound effect on the country's hosting of sports events, the China Olympic Committee has said.
As the nation eagerly waits to hear whether the International Olympic Committee will vote on Friday to hand Beijing the coveted 2008 Games, Shanghai has learned it will be home to the 2002 Tennis Masters Cup.
It is the largest professional sporting event the country will host to date, and in it the world's top eight male players will compete for US$3.7 million in prize money and the opportunity to be crowned the world's No 1 player.
"With China's entry into the WTO, sports contests will be opened wider to foreign investors, which will in turn be a boost to the domestic sports industry," said Wu Shouzhang, vice-chairman of the China Olympic Committee.
He added that when the domestic sports market expands, more exciting world matches and world sporting celebrities will be attracted to the country.
He said although overseas businesses will be an attraction for domestic capital and will post a challenge to home companies, it will help activate the sporting market and push the industry towards market orientation.
The domestic sports industry is widely recognized and has great potential to attract businesses.
In the United States, the sports industry accounts for 2 per cent of its gross domestic product, compared with less than 0.2 per cent in China.
Wu said experienced foreign companies in the sports business would help mature and standardize operations like sponsorship, broadcasting and advertising in the sports market.
"The sports industry is expected to be a new focal point of the country's economic growth fuelled by China's WTO accession," Wu said.
Although the sports match sector stands to enjoy unprecedented opportunities brought about by the historic change, sports goods manufacturers will have to face severe challenges from their overseas counterparts, according to Yu Zaiqin, vice-director of the Sports Equipment Department of the State Sports General Administration.
The WTO accession will certainly come with gifts for Chinese sports goods producers, who are mostly in the garments and equipment-making fields, he said.
WTO membership will break down trade barriers and open up possibilities for overseas expansion.
China is already a major sports goods maker in the world. The global share is certain to be boosted after the country becomes a member of the world economic body.
"But in the domestic market, the unease is mostly about Chinese sports products companies, unlike the automobile and telecommunications industries, which enjoy a certain degree of protection and co-ordination by government authorities and are not truly prepared to play with their international counterparts," Yu said.
The main concern is how to narrow the gap between domestic sporting goods and big-name foreign brands in terms of quality, technology and profit.
The total import volume of sports goods will see a sharp rise after the large-scale invasion of foreign brands, he indicated.
The advantage of Chinese sports goods is their lower cost, although most Chinese sports fans would prefer to be wearing designer labels.
"World giants such as Nike and Adidas are too strong to compete with," Yu said.
Yu suggested a sizable portion of small and medium-sized enterprises, particularly those which make up client orders on demand from raw materials, may have to withdraw from the home market.
"Larger domestic companies, such as gymnast Li Ning's sports goods company, are expected to be able to compete with the global giants," he said.
"Sports goods are different from other commodities and we should make full use of people's admiration for those stars who have won trophies for the country to create our own brand names," he suggested.
Some sporting celebrities have begun to join up with Chinese-made sports goods manufacturers.
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