Thinking about Data Center business in China, consider the lessons of Soccer

There are a bunch of friends I have discussed the challenges of conducting data center business in China.  The Economist has a great article on Why China fails at Football (Soccer).

Why China fails at football

Little red card

The telling reasons why, at least in football, China is unlikely to rule the world in the near future



  • The Buddha tells the people he can fulfil only one of their wishes. Someone asks: “Could you lower the price of property in China so that people can afford it?” Seeing the Buddha frown in silence, the person makes another wish: “Could you make the Chinese football team qualify for a World Cup?” After a long sigh, the Buddha says: “Let’s talk about property prices.”

What is the challenge of doing business in China?  Understanding how money influences the system.

Qingdao’s owner Du Yunqi was irate—at his team’s utter incompetence. As he would later admit to investigators, he had just lost a bet that there would be a total of four goals scored in the game. His humiliated assistant coach said on national television, “Afterward the boss was angry and scolded me, saying I bungled things and couldn’t even fix a match.”

If you think data centers are private business, you can't see the connections to the government.

All this hints at something rather unique and powerful about the place of football in Chinese society. It is, like all organised sport in China, ultimately the domain of the government;

What outsiders call corruption is simply the way the Chinese system works.

A recent crackdown on football corruption offers little solace; it simply mirrors the pyrrhic campaigns against official corruption elsewhere in China. A mid-level functionary in China’s state security apparatus puts it candidly: “You know all those problems with society that you like to blame on China’s political system? Well it really is like that with football.”

Data Centers are a priority for the Chinese government.  Soccer is as well.

So whatever ails Chinese football, it is not a lack of passion from the country’s leaders. If anything, the opposite may be the problem. China’s Party-controlled, top-down approach to sport has yielded some magnificent results in individual sports, helping China win more Olympic gold medals in Beijing in 2008 than any other country. But this “Soviet model” has proven catastrophically unsuitable for assembling a team of 11 football players, much less a nation of them.

It would be interesting to survey the additional budget required to support keeping "favors."

Investors would contrive to fix games as favours to the local officials who nominally controlled the clubs (these types of matches are called “favour”, “relationship” or “tacit” matches, and are not viewed negatively by many within the game). Gambling syndicates, including the triads, began exerting influence over investors, referees, coaches and players. A spoils system evolved, and everyone took their cuts.

WSJ blogs about the soccer corruption trials.


China’s long-awaited trial into alleged bribery by the former head referee of the country’s soccer association has begun. The body pledged to fight corruption. More here and here. (China Daily, Xinhua, Xinhua, AFP)

A FIFA anti-bribery panel may be further expanded, its head said. Ted Howard isreported to be the new general secretary of the Caribbean, North American and Central American soccer confederation after Chuck Blazer left. More on a meeting by the FIFA Executive Committee in Tokyo is available here,hereherehereherehere and here. (Bloomberg, Inside World Football, Guardian, Daily Telegraph, AP, BBC, MidEast Soccer, Reuters, NZ News)