The International Journal of the History of Sport

ISSN: 0952-3367 (Print) 1743-9035 (Online) Journal homepage: http://www.tandfonline.com/loi/fhsp20

Globalization and the Governance of Chinese

Sports: The Case of Professional Basketball

Fuhua Huang & Fan Hong

To cite this article: Fuhua Huang & Fan Hong (2015) Globalization and the Governance of
Chinese Sports: The Case of Professional Basketball, The International Journal of the History of
Sport, 32:8, 1030-1043, DOI: 10.1080/09523367.2015.1035261

To link to this article: http://dx.doi.org/10.1080/09523367.2015.1035261

Published online: 22 Apr 2015.

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 The International Journal of the History of Sport, 2015
Vol. 32, No. 8, 1030–1043, http://dx.doi.org/10.1080/09523367.2015.1035261

Globalization and the Governance of Chinese Sports: The Case of

Professional Basketball
Fuhua Huanga* and Fan Hongb
a
School of Physical Education and Sports, Jiangxi Normal University, Jiangxi, China; bBangor
University, UK
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This paper aims to explore the manifestations of globalization and sport governance in
China through a lens of basketball. Specific focus is centred on the extent of the
universalization of the National Basketball Association’s (NBA) governance model in
China and the adaptation from Chinese basketball. It argues that the vertical-
centralized power allocation of Chinese basketball has prevented the NBA’s
governance model being fully assimilated and universalized in the Chinese context.
When the localization of the NBA’s capitalist setting encounters the state power of
China’s socialist regime, Chinese political nationalism has tended to provoke a firm
entrenchment to protect the government’s sovereignty.
Keywords: globalization; sport governance; Chinese basketball

Introduction
Globalization is one of the most formidable forces in human history and is dramatically
shaping and transforming the modern world. Engaging with globalization has paved the
way for China’s societal transformation and multifaceted integration with the outside
world since the early 1990s. This process has been largely intertwined with fast-paced
internal urbanization and modernization, within which globalization continues to
influence China’s social structure due to its liberalizing forces. China’s radical and deep
societal transit under globalization is also shaping the trajectory and momentum of the
development of Chinese sport in a profound way. Focusing on the political and
institutional manifestations of sport globalization, this paper aims to examine the
interconnectedness between globalization and sport governance in China through a lens of
basketball.
The most common debate associated with the literature on political globalization
revolves around the assertion that globalization entails the demise of the nation state.
In the realm of sport globalization, much of these debates have focused on two ways: the
increasing number and power of international sporting organizations, such as the
International Olympic Committee (IOC) and the Fédération Internationale de Football
Association (FIFA), may undermine the authority of the nation state; and the worldwide
spread of governance models and the emergence of isomorphic forms of governance
throughout the globe. The question of whether political globalization is or has been in
reality curtailing the autonomous sporting power of nation states has been well explored
by sport academics.1 Most of these studies have revealed that nation states are retaining
power and identity in an increasingly globalized sport world. The other concern with

*Corresponding author. Email: huang.fuhua@jxnu.edu.cn

q 2015 Taylor & Francis

 The International Journal of the History of Sport 1031

regard to the political globalization of sport, the global spread of sport policy and sport
governance models, is also drawing growing attention in recent years.2 These works not
only offer theoretical perspectives and methodologies in discussing globalization and
sport policy, but also provide case studies of transnational and comparative analysis of
sport policy and governance from a variety of countries. However, many of these issues on
globalization and sport governance in relation to Asian countries are still under-focused.
This study adds to the field with a case study from China and the analytical approaches the
foregoing research showcases are adopted in dealing with globalization and the
governance of Chinese basketball.
In China, the globalization of basketball is interplayed between two actors: the
National Basketball Association (NBA) of the USA which serves as global power and
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the Chinese Basketball Association (CBA) which serves as local power. Therefore, the
process of globalization of basketball in China is dichotomized as the result of a
contextual and competing interplay between the penetration of the NBA and the
consequent engagement with Chinese basketball. Specific focus is centred on the extent to
which the NBA’s governance model has been universalized within the Chinese context,
and to what extent the CBA has particularized its governance model with the adaptation to
the NBA’s paradigm. A key question is to what extent this process has undermined
China’s state power? The examination of their global – local interaction is accomplished
through a comparison of the governance models used in the two leagues. Following on
from this, the governance model for professional team sport is also conceptualized into
four segmentations following Borland’s taxonomy: governing authority, product market,
capital market, and labour market.3

Trajectory: The Global – Local Nexus with Chinese Basketball

Global Reach of the NBA
Since the Second World War, the sport world has been changing more rapidly and
profoundly than ever before. Most significantly, it has been commercialized to a great
degree following the collapse of amateurism across western countries. Furthermore, this
trend has been reinforced by certain historical forces since the late 1980s: the collapse of
Cold War Olympic politics between capitalist countries and socialist countries following
the collapse of the Soviet Union;4 the evolution of free market economies in many
countries; and the emergence of new cable and satellite systems and television networks
that supply their broadcast services throughout the world.5 As a result, capitalist sports are
aggressively seeking profits and markets domestically and globally and have consequently
accelerated the pace of sport globalization.
The NBA is a typical capitalist sporting entity. The strategy behind the NBA’s first
global appearance was to showcase its superiority in world basketball. The Olympic
Games and the International Basketball Federation (FIBA) World Championships seemed
two natural channels via which to do this. However, the NBA did not push FIBA to let
NBA stars participate in the Olympics. Instead, the McDonald’s Open was born in 1987.
This annual international basketball tournament, sponsored by McDonald’s, was the first
substantial platform linking the NBA to world basketball. Participating teams included
NBA teams and the champions of the Euroleague Basketball. NBA teams kept winning
first place throughout the late 1980s to 1990s.
The principal figure in reality pushing for the acceptance of NBA players into the
Olympics and World Championships was FIBA’s General Secretary, Boris Stanković.
In 1984, the IOC passed legislation allowing individual sporting federations to determine
 1032 F. Huang and F. Hong

eligibility guidelines. Since then, international sporting bodies have tended to let
professionals participate in the Olympics. On 7 April 1989, the FIBA committee finally
voted to drop restrictions on professional basketball players competing in international
events. The Dream Team, composed of NBA superstars, immediately evoked a global
NBA mania at the Barcelona Olympics.

Commercialism and the New Order of World Basketball

The changes the Dream Team wrought on basketball went far beyond the basketball
court where NBA superstars won the gold medal with an average of 43.8 points over
other teams. It brought the relationship between the Olympics and advertising to a new
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level. Within four years of the Barcelona Olympic Games, the NBA, whose marketing
division USA Basketball had been hired to market its gear, made the US Olympic
basketball team apparel available in 17 countries, compared to seven in 1992. By 1996,
the league’s total global merchandise sales amounted to roughly USD $3 billion, up
from USD $1 billion in 1990.6
Since the early 1990s, American basketball’s growing dominance in world basketball
and the overwhelming globalizing commercial force enveloping the NBA stars have
jointly contributed to the reconstruction of a new world order in basketball. Soon after the
Barcelona Olympic Games, the world witnessed the NBA’s aggressive expansion beyond
the US borders. Two franchises from Canada, Toronto Raptors, and Vancouver Grizzlies
were awarded membership by the NBA in 1993 and 1995. Within the five years from 1992
to 1997, 10 overseas offices had been set up outside the USA, spanning five continents
throughout the world.7
Furthermore, the NBA’s commercial success and global impact have provided an
example to basketball governing bodies around the world. Since the late 1990s, an
increasing number of countries have begun to learn from the NBA’s governance model in
running their own professional basketball leagues. For instance, Mexico adopted the
NBA’s franchise system with the establishment of the National Professional Basketball
League in 2000. This type of North American sports league model is also becoming more
and more popular in Asian countries. The major professional basketball leagues in Asia
employ this governing model, including the Korean Basketball League (KBL, est. 1997),
the Iranian Basketball Super League (IBSL, est. 1998), the Super Basketball League (SLB,
est. 2003) in Chinese Taipei, the Chinese Basketball Association League (CBAL, est.
2003), and Japan Basketball League (JBL, est. 2005). The next section will focus on the
CBAL’s adoption of the NBA’s governance model.

Local Response from Chinese Basketball

Participation in international sports competitions and organizations has long received the
approval of the Chinese government, but to pursue internationalization by conducting
internal reformation is pioneering. Three forces enabled the CBA to undertake the
breakthrough reformation aimed at achieving professionalization and marketization in
the mid-1990s: the emergence of China’s market economy, the Olympic Strategy, and the
ruling of accepting professional players into FIBA Championships and the Olympics. The
primary approach of the CBA was to reformat the traditional premier nationwide
competition, the Top-Eight Basketball Tournament, into a professional basketball league
called the Jiaji League (1995 –2003). The European model was adopted by the CBA in the
league’s first decade.8
 The International Journal of the History of Sport 1033

Under this model, however, the Jiaji League remained a sports tournament rather than
a professional sports league except for the fact that it operated a home-and-away system.
The 1995 season, which was also called the Top-Eight Tournament or ‘Initial Season’,
lasted for only two months, from February to April. Participating teams included the top
eight teams from the 1994 national tournament. Before the 1995– 1996 season started, the
CBA made a number of changes to the league to allow it to be further professionalized. For
instance, the CBA issued three regulations on league management, player-transfer
methods, and club management. However, the league was still far from ‘professionally’
run. At the 1999 National Routine Meeting for Basketball, Xu Chuan, vice-director of the
Chinese Basketball Management Center (CBMC),9 pointed out that: (1) financial support
for the league was insufficient and that they should develop new ways to open the games
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up to the market; (2) under the strict promotion/relegation system, some clubs focused
only on short-term interest, while the long-term development of the clubs was being
ignored; (3) marketing of the games should be emphasized so as to attract more basketball
fans; (4) the quality of the games was low and young players did not have enough chances
to compete in the contests; and (5) the players’ salaries, particularly those of international
players, were going up too fast, resulting in some clubs having to scramble for players and
using improper methods to ensure their participation in the league.10
Inspired by the speech of Xu Chuan, Li Yuanwei, then vice-director of the CBMC,
turned his attention to alternative league models. He led a group of officials to Japan and
Korea in 2011 to learn how the JBL and KBL were run. When Li Yuanwei took over as
first chair of the CMBC in 2003, he decided to further restructure the league’s organization
and launched a commercialization reformation for the proposed CBAL,11 drawing upon
the North American professional sports leagues model. Later in the same year, he led
another group of officials to the USA to learn how the NBA and the National Collegiate
Athletic Association (NCAA) were run. In Li Yuanwei’s opinion, the NBA’s approach to
running a professional basketball league held some useful insights for the Chinese. From
his examination of the NBA, Li Yuanwei contended that there were some major problems
that the CBA needed to address: (1) the property rights and investment systems of the Jiaji
were ambiguous, and an incentive system was needed to attract market investment; (2) the
league and the clubs had not yet formed an interest incorporation; (3) the league lacked
marketing strategies and managerial professionals; (4) sponsors were not loyal enough to
the league; and (5) clubs and players were not loyal enough to the fans so younger fans
tended to follow the NBA.12
In order to solve these problems, in September 2003, the CBMC set up the Research
Group for the Operation of Basketball Professionalization. The members of the group
included: Liu Yumin, vice-president of the CBA and a famous basketball player for the
women’s national team; Dr Bao Mingxiao, a renowned professor in the field of sport
economics and industry in China; Xu Jicheng, a senior correspondent for Xinhua News
who was familiar with the NBA’s operation and a part-time interpreter for the national
basketball teams; and Yan Xiaoming, a graduate of Tsinghua University who had served
as general manager of the Liaoning Panpan Basketball Club for eight years. The group
hired Shanghai Qianrui Sports Business Consultancy Co. Ltd to conduct a comprehensive
market survey. After the six-month survey of basketball-related sponsors, fans, clubs,
players, venues, and media had been completed, the research group and Qianrui Co. came
up with a detailed market report. In addition to this report, the CBMC looked at the
governance models of 13 professional sports leagues, including the National Football
League of the America, the NBA, and England’s Premier League. On 5 April 2004, the
CBMC put forward its proposal for the North Star Project (NSP).13
 1034 F. Huang and F. Hong

The aims of the NSP were to: (1) make the CBAL the best professional sports league in
Asia and a world-class professional basketball league; (2) develop the CBAL into a sound
brand; (3) make the CBAL a cradle for the development of high-level basketball players;
(4) have CBAL teams win more international basketball competitions; and (5) make the
CBAL a persistent and profitable sports league.14 The Project was set to be carried out in
three stages: (1) Stage I – Initialization (2005 –2008): to improve the league and its clubs’
capabilities in managing, operating, and developing the CBAL. This stage aimed to build a
normative model (closed-membership, franchise system) for the professional sports
league; (2) Stage II – Development (2009 –2012): to clarify the property of the CBAL and
attract long-term marketing partners; and (3) Stage III – Consolidation (2013 – 2015): to
conclude the works of the two previous phases and to come up with further strategies to aid
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in running the league. It was also emphasized that the aims of the NSP should be
accomplished in this phase.15
The implementation of the NSP amounted essentially to cloning the governance model
of the NBA despite Li defended in public that his reformation was applying ‘Nalai Zhuyi
from (selectively emulating) the NBA’. He stated:
We always encourage the values of openness. Chinese professional basketball is in its infancy.
We should learn something useful from the NBA and also take into account our national
characteristics. That is why I strongly advocate ‘NaLai ZhuYi’. The useless [experience and
practice] from the NBA which is not suitable for our country should be rejected.16
Even though this explanation is somewhat only in obedience to the political environment,
there remains the question whether the implementation of the market-oriented NSP could
get over the current institutional constraints from the Juguo Tizhi (the whole country
supports the elite sport system) in Chinese sport. The next section will elaborate this.

Conflicting Globalization: A Professional Sports League with Socialist

Characteristics?
This section expounds the extent to which the NSP has emulated the NBA’s governance
model, and to what extent Chinese basketball has generated heterogeneity in the Chinese
context, through the method of transnational comparison. To begin with, it is necessary to
introduce the stakeholders and infrastructure of a professional sports league. Borland17
suggests that production of a sporting competition incorporates at least three main
components: (1) the set of players able to be chosen to participate in the sporting
competition; (2) the clubs that will organize players into teams to participate in the sporting
competition; and (3) a sporting league or association18 that will have responsibility for the
design and management of the sporting competition.19 These components, according to
Borland, frame the production of team sports into four segments: governing authority,
labour market, capital market, and product market (see Figure 1). This section will go
through each of these segments in turn.

Governing Authority
The two fundamental issues concerning governance authority of a sports league pertain to
the power structure of the league and teams and the extent to which an independent
authority plays some role in the operations of the league.20 The NBA is a typical North
American closed-membership professional sports league, under which member teams are
independently owned and managed, and collectively create the league as a joint venture
for co-ordinating their league activities.21 In these leagues, a commissioner or president is
 The International Journal of the History of Sport 1035

Governing
Authority

Product Market
League

dy ing
Bo ern
Capital Market
ov
G

Teams

Labor Market
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Players

Figure 1 Stakeholders and infrastructure of a professional sports league

the chief operating officer of the league, while team owners make up the board of
directors. The chief executive may have considerable expressed authority in the league’s
rules and policies.22 In practice, governance power of the NBA is centralized in a Board of
Governors, who are the team owners, and a selected, independent Commissioner.
In contrast, governance structure and power allocation in Chinese basketball are more
complicated (see Figure 2). Therefore, the relationship between the governmental and
non-governmental (NGO) basketball systems that are both involved in the governance of
the CBA, the CBMC, and the Chinese Basketball Association League Committee
(CBALC) needs to be clarified. The CBA, a nationwide non-governmental sports
organization and a non-profit association, is a member of the All China Sports Federation
(ACSF), an Olympic organization recognized by the China Olympic Committee, and the

Non-governmental System

FIBA

Governmental System FIBA Asia

General Administration of Sport (GAS) CBA Board Composition

All-China Sports Chinese Olympic

Federation Committee
A head of the GAS

President
Chinese Basketball
Provincial
Management Center Chinese Basketball Association (CBA)
Sport Admin.
(CBMC) Heads of provincial sport administrations
Head of the CBMC

Provincial Basketball Provincial Basketball CBAL Committee Vice Presidents

Management Center Association (CBALC)

General secretary is the head of the

CBMC
Deputies are directors of CBMC
Secretaries
departments
Clubs CBAL

Players Marketers

League Organization

Figure 2 Governance structure and power allocation in Chinese basketball

 1036 F. Huang and F. Hong

only legitimate Chinese organization qualified to participate in the FIBA and the Asian
Basketball Confederation.23 However, most of the decision-making seats are taken by
governmental officers from the General Administration of Sport (GAS) and the CBMC.
The CBMC, the deputy secretarial office for the CBA, was established on 24
November 1998 as a unit subordinate to the GAS. Therefore, the heads of the CBMC are
appointed by the GAS. Under the CBMC, there is a department named the Professional
League Office, which is responsible for all the affairs of the CBAL.24 Taking the
composition of the CBA and the CBMC into account, it is seen that the CBMC is the true
and dominant power in governing Chinese basketball. It should also be noted that the
CBMC is under the pressure to meet the interests of the GAS, which is still focused on
winning international games. Such a Chinese-style personnel formation is also evident in
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the broader public sector, known as ‘One Personnel, Two Boards’ (dual portfolio). In other
words, the CBA is still under control of Chinese government in spite of its embrace of non-
governmental principles in the charters.
The creation of the CBALC in 2005 was a substantial development in the first phase of
the NSP. It’s comprised of both CBMC officers and government – independent
stakeholders. According to the NSP’s second-phase plans, this Committee would be
reorganized into a government – independent company (the CBA Company), a
shareholding corporation, so as to weaken the government’s power and pass the power
to the market. To achieve this, the Company would be under leadership of a Chief
Executive Officer (CEO), a governing authority like the NBA’s Board of Governors, and a
commissioner like the NBA’s Commissioner.25
However, Li Yuanwei’s NSP was disbanded by Xin Lancheng, a conservative, who
replaced Li as the director of the CBMC after the Beijing Olympics. Xin announced his
governing principles as soon as he assumed office in early 2009, which were obviously
intended to negate Li’s previous ‘radical’ reform.26 He contended that the CBMC would
insist on the government having a leading role in administrating Chinese sports and make
good use of the ‘Juguo Tizhi’ in the market economy. As a result, the CBALC and the
CBMC’s Professional League Office were dismantled. The CBAL is once again
administrated by the CBMC’s Competition Department, while the CBMC as a whole
prioritizes building and training the national teams. This implies that even though some
manner of down-to-earth sport reformation is on the cards and remains strongly called for
by Chinese sportspeople, the Chinese government will continue to monopolize the
governing power in sport to serve national interest after the Beijing Olympics.

The Product Market

A product market is a mechanism that allows people to easily buy and sell products.27 In
the production process of professional team sports, the combination of contests between
teams, which is normally known as a league, is the product ready to be consumed by
sports fans. To emulate the NBA’s product marketing model, the NSP abolished the
league’s promoting and relegating system before the 2004– 2005 season began.
According to the NSP, the CBAL also started to adopt a closed-membership system and
to normalize the membership determination process. Since then, the CBAL has
successfully duplicated the NBA model in formatting the league’s scheduling, including
organizing summer camps and pre-season games, the regular season, all-star games, play-
offs, and the finals.28
First, following the summer break, NBA teams have training camps in late September.
After the training camps, a series of pre-season exhibition games are held. The CBA
 The International Journal of the History of Sport 1037

started to organize pre-season games in the 2004 – 2005 season. However, the CBA does
not organize a training camp during the summer. This is because the camp’s function in
evaluating new players and adjusting the team roster is unnecessary for most CBAL teams
due to the fact that player-transferring is still inactive in the CBAL, and the new recruits
normally come from within their own squads.
Second, the NBA regular season schedules use a round robin system. Currently, during
the regular season, each team plays 82 games, 41 home, and 41 away. The CBAL regular
season is also based on a round robin system. The time span and number of games to a
great extent depend on the national teams’ arrangements and the ins-and-outs of the
different teams. For example, the 2006 –2007 season saw 50 days off in the league’s
schedule to allow for the national team’s preparations for the Asian Games;29 the 2007 –
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2008 season saw the shortest ever CBAL season because of the preparations needed for the
2008 Beijing Olympics.30
Third, in February, the regular season in the NBA is put on pause to celebrate the
annual NBA All-Star Game. Between the regular season and the play-offs, the CBAL
holds an All-Star Game as well. The rosters are voted for online by fans, as in the NBA,
whoever receives the most votes in each position in each team is given a start, while bench
players are appointed by the teams’ coaches, who are usually hired from the two leading
teams in the regular season. The player with best performance during the game is rewarded
with a Most Valuable Player (MVP). Other attractions like the Rookie Challenge, the
Skills Challenge, the Three-Point Contest, and the Slam Dunk Contest are copied from
the NBA.
Fourth, the NBA Playoffs begin in late April, with eight teams in each conference
going for the Championship. The CBAL Playoffs begin one week after the regular season
ends, also with the eight best teams competing for the Championship in an elimination
tournament system, higher seeded teams availed of certain advantages. The elimination
tournament pattern is the same as in the NBA except for the number of games in each
series. In the CBAL, the final games follow a best-of-seven pattern, whereas all other
rounds follow a best-of-five pattern.
Fifth, the final play-off round, a best-of-seven series between the victors of both
conferences, is known as the NBA Finals, which are held annually in June. The victor in
the NBA Finals wins the Larry O’Brien Championship Trophy. Each player and major
contributor – including coaches and the general manager – on the winning team receive a
championship ring. In addition, the league awards the Bill Russell NBA Finals MVP
Award to the best performing player of the series. Similarly, the champion of the CBAL is
presented with the Mou Zuoyun Cup.31 The Finals are usually held in April but if the
national teams’ arrangements mean cutting short the league, they will be held earlier, in
March or February. The best performing player of the series is awarded a CBAL Finals
MVP. Other trophies, such as championship rings, T-shirts, and caps are also adapted from
the NBA.

The Capital Market

A capital market is a market in which business enterprises (companies) and governments
can raise long-term funds.32 The main participants in the capital market for the
professional team sports industry are the team owners. They invest money to hire players
as labour and assemble their teams into a league to collectively produce sport goods for
benefits. Compared to the relatively smooth process of emulating the NBA in product
market, Li’s reformation in the capital market encountered much difficulty.
 1038 F. Huang and F. Hong

On the one hand, ownership of CBAL’s clubs, in contrast with the NBA clubs’, is
complicated and ambiguous. To be exact, power monopoly of Chinese government is
evident in the CBAL. There are only two types of ownership among the NBA’s 30 teams:
individual equity and investment syndicate equity. The individual equity ownership model
of sports organizations involves a single, independently wealthy owner or a group of
individuals who pool their resources to acquire ownership of the team.33 In an investment
syndicate owned sport team, some documents typically outline the rights and
responsibilities of each investor.34 This transparent corporate ownership structure enables
NBA clubs to carry out their own business with little governmental intervention.
Differently, governmental intervention in Chinese professional basketball has effects
not only at state level, but also at the provincial and municipal levels. The CBAL was
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based on the structure of the aforementioned Top-Eight Tournament, which was an annual
national basketball competition between army teams and provincial teams. Therefore,
most of the participating teams in the early seasons of the CBAL came from armies and
provincial administrations. Despite corporate investment in sport being permitted and
taking place since the early 1990s, and the NSP requiring all CBAL clubs to be corporate-
owned, up until the 2011– 2012 season, there were still six types of shareholders to be
found in CBAL clubs: private enterprise, state-owned enterprise, public company, the
army, sports colleges, and sport administration bodies. The property of a club is owned by
one shareholder or is a joint venture between two or more shareholders.35
This ambiguous ownership structure has led to an unbalanced power allocation within
the CBAL club. First, in the case of sport administrations as a shareholder (sports colleges
are usually owned by sport administrations), the power is in reality in the hand of the sport
administration, which controls resources, including players, coaches, and venues. As such,
corporate investors have difficulty having their demands met during decision-making
processes. Second, problems can also exist even if the clubs are purely owned by corporate
investors, and they are still unable to manage all their affairs without some intervention
from local governments or sport administrations. This is particularly evident in releasing
and contracting players, which will be discussed in the next section. Third, some clubs that
are in co-operation with state-owned enterprises tend to be heavily dependent on the local
government or sport administration. Fourth, even for those in co-operation with privately
owned corporate investors, they are still dependent upon local governments. A key reason
for this is that few CBAL clubs so far have been able to balance their chequebooks without
receiving awards or allowances from local governments or sport administrations. Fifth,
with the abolition of the NSP, all clubs are required to register with the appropriate sport
administrations in order to be eligible to play in the CBAL. This further weakens the
power of non-governmental shareholders.
On the other hand, therefore, the incentives of Chinese government’s prioritizing elite
basketball has meant that market-oriented operation in the NBA is difficult to be carried
out in the CBAL. By utilizing a franchise system and territory monopoly, the NBA’s
capital market operates as a cartel, which has been defined as ‘a group of firms that
organize together to control production, sales, and wages within a business’.36 This cartel
model that the NBA franchises form has ensured profit-maximization for investors. It has
made the NBA teams rich entities over the past number of decades. The aborted CBA
Company in the NSP was in reality an isomorphic form of cartel, and looked like a
promising way to profit-maximize the league and the clubs. However, under the governing
principles of ‘Juguo Tizhi’ for international competitions, the dual portfolio of the CBA as
both a policy-maker of Chinese sport and a key shareholder of the professional league, in
addition to provincial or municipal administrations’ tendency to prioritize the National
 The International Journal of the History of Sport 1039

Games, it is now difficult for Chinese professional basketball to form a profit-maximized

capital market, because issues such as schedules and labour transfers come second to
international games and the National Games.

The Labour Market

The labour market functions through the interaction between workers and employers.37
The quality of workers (the players) is the most significant determinant in the production
of professional team sports. Therefore, roster restocking is a matter of considerable
importance and interest to the league, teams, and their fans.38 A labour market is generally
comprised a player reserve system, player mobility, and a player salary determination
process.39
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In the NBA, the nationwide player reserve system benefits from a large pool of grass-
roots (Amateur Athletic Union) and amateur collegiate players (NCAA), as well as a lower
league (NBA Development League). Most of the current NBA players are from the
NCAA. In regard to player mobility, there are three main ways that an NBA team goes
about the annual business of roster assembly. The first way is to acquire new players via
the NBA Draft. The second way an NBA team restocks its roster is by signing ‘free
agents’. The third method NBA teams use to assemble rosters is via inter-team trades and
purchases of players whose rights are owned by other teams in the league.40 The salary
determination process used in the NBA is strictly subject to the collective bargaining
agreement. Players have both of two sources of income. Collectively, players are
guaranteed to receive a fixed minimum rate of revenue in salaries and benefits from the
league’s entire income, which is known as ‘Basketball Related Income’. Individual
salaries are negotiated between the players and the clubs subject to the collective
bargaining agreement in effect at the time of negotiations.41 The NBA also adopts the
salary cap system to promote parity between teams and cost control.42
Chinese elite basketball players are selected and trained in three systems: the sports
school system, the educational system, and the public system. The sports school system,
formed in the 1950s, was adapted from the system used in the former Soviet Union. Under
this system, young players are trained full time in state-supported sports schools. Athletes
with potential are promoted through a pyramid system from municipal-level sports schools
to provincial-level or army teams, and the best are selected for the national teams. Most of
current CBAL players are called up from this system. The educational system provides
opportunities for primary and secondary school students to be recruited by sports colleges
or higher-level teams, namely the secondary teams of professional clubs and the collegiate
high-performance teams. However, so far, few professional players in the CBAL have
come directly from the educational system. Up to 2012, there were only a handful of
players recruited by CBAL teams. The public system, in particular the secondary teams of
professional basketball clubs, has become the cradle for nurturing most young Chinese
basketball talents in the past decade. In short, most of CBAL players are owned by clubs
before they join the league.
Therefore, a rigid player register system, which is similar to the reserve clause,43 is still
in use to prevent mobility of players between teams. According to the Management
Methods Relating to Basketball Player Registration and Mobility issued by the CBMC:
‘upon the expiration of a contract between a player and a club, the club retains the right to
sign an extending contract and register it with an appropriate basketball association for
the player. The extension time depends on how many years the player has played for the
club . . . ’.44 According to this regulation, a player should become a free agent once
 1040 F. Huang and F. Hong

the extended years are covered. In practice, however, only very few CBAL players have
succeeded in signing a new contract with another club. The major reason for this is that, in
the Statutes of the Chinese Basketball Association, it also regulates that all players
participating in any national basketball competitions, including the CBAL or its youth
league, must be registered with the CBA or its subordinates (such as provincial basketball
associations).45 As a result, before signing a new contract with another club, a player
should be released not only by the club, but also by the local basketball association.
It should be noted, again, that local basketball associations are still under control of local
sport administrations or local governments. The aim of local sport administrations or
governments, however, is to the greatest extent possible to achieve high levels of
performance in the National Games, which are held every four years between provincial
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districts. It is an important platform for the GAS to recruit athletes into the national teams.
The performance that a local sport administration achieves in the National Games is
normally directly associated with the financial grant that the sport administration can
receive in the next national-game-cycle. It is also a very important assessment of the
capabilities of the leaders of local sport administrations. As a result, the clubs, on behalf of
the sport administrations, may tend to net and farm players for the sake of National Games
rather than the league. Thus, end-of-contract CBAL players are in reality still considered
in terms of the interests of local sport administrations. This power monopoly of clubs and
local sport administrations has meant that inter-team trading rarely occurs.
Moreover, since the players are the lowest actors in the power hierarchy of Chinese
basketball (also see Figure 2), their authority is weak and with little legal protection. In the
CBAL, there are no universal salary determination procedures, nor is there a collective
salary for the players. The salaries of individual players vary from club to club and are kept
confidential. There is even no normative labour contract between the clubs and the players.
Worse still, unlike most other professional sports leagues in the world, where a labour
union is usually set up to protect players’ rights and to liaise with club managers and the
league, no such union has ever been formed to protect CBAL players’ rights.
With Li’s NSP, an NBA-isomorphic labour market was proposed and temporarily put
into practice: (1) in terms of the player reserve system, to set up a Chinese Basketball
Development League under the CBAL, which would provide player reserve support for
the CBAL; (2) in terms of labour mobility, to initiate a player mobility system and a player
draft system; to draft a normative player labour contract for the clubs, which would be
supervised by the CBA; and to employ a free agency training camp; and (3) in terms of
salary determination, to create a player salary determination system, in which the
collective salary of all CBAL players would be set at around 33%.46 This idealized
reformation seemed to be a way to redress the low competitive balance of the CBAL.
However, with Li’s retirement, it has turned out that such ‘openness’ was only an
academic exercise and will never be adopted as long as the stereotypical state-centralized
selection and training system under ‘Juguo Tizhi’ retains its hold over Chinese basketball.

Conclusion
In the political and institutional dimension of sport globalization, this paper has
demonstrated a scenario of dilemma in relation to the globalization of the governance of
Chinese basketball. When the localization of the NBA’s capitalist setting encounters the
state power of China’s socialist regime, Chinese political nationalism has tended to
provoke a firm entrenchment to protect the government’s sovereignty. In 2003, the
CBMC gave up the European model and advocated the NSP, which aimed to turn the Jiaji
 The International Journal of the History of Sport 1041

League into an NBA-isomorphic league named the CBAL through the employment of a
franchise system. But the vertical-centralized power allocation of Chinese basketball has
prevented the NBA’s governance model being fully assimilated and universalized in the
Chinese context. The NSP was terminated in 2009 and the government’s dominance over
Chinese basketball was secured. In terms of governance authority, Li Yuanwei’s
proposed reformation towards a market-driven governing body was finally swept over in
favour of the stereotypically Chinese nationalized governance model, which is
characterized by the state government’s dual portfolio. The product market succeeded
in cloning the NBA’s model, but the prioritization of the national teams still negatively
impacts on the league’s gaming schedules. In the capital market, CBAL clubs are in some
respect dependent on provincial and municipal government authorities, which result in
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the incentives in club-building resting more on the National Games than on the
professional league. Thus, the clubs fail to pursue profit-maximization. In the labour
market, player mobility is stunted since the clubs favour netting and farming their own
talents for the sake of success in the National Games. Players’ interests are also deserted
and unprotected under the ‘Juguo Tizhi’.

Disclosure statement
No potential conflict of interest was reported by the authors.

Notes on Contributors
Fuhua Huang is a lecturer at the School of Physical Education and Sports, Jiangxi Normal
University, China. His main research interests are globalization and sport, professionalization and
commercialization of sport, sport history, and traditional sports.
Fan Hong is Professor in Chinese Studies at Bangor University, UK. Her main research interests are
in the areas of culture, politics, gender, and sport, and she has published extensively in these areas.

Notes
1. L. Allison, The Global Politics of Sport: The Role of Global Institutions in Sport (London/New
York: Routledge, 2005); J. Maguire, ‘Globalisation, Sport and National Identities: “The
Empires Strike Back”?’ Loisir et Société/Society and Leisure 16, no. 1 (1993), 293–321;
B. Houlihan, ‘Sport, National Identity and Public Policy’, Nations and Nationalism 3, no. 1
(1997), 113– 37; A. Bairner, Sport, Nationalism, and Globalization: European and North
American Perspectives (New York: State University of New York Press, 2001); and
J. Hargreaves, ‘Globalisation Theory, Global Sport, and Nations and Nationalism’, in
J. Sugden and A. Tomlinson (eds), Power Games: A Critical Sociology of Sport (London/New
York: Routledge, 2002), 25 – 43.
2. M. Green and B. Houlihan, Elite Sport Development: Policy Learning and Political Priorities
(London/New York: Routledge, 2005); I.P. Henry and the Institute of Sport and Leisure Policy,
Transnational and Comparative Research in Sport: Globalisation, Governance and Sport
Policy (London/New York: Routledge, 2009); B. Houlihan, ‘Mechanisms of International
Influence on Domestic Elite Sport Policy’, International Journal of Sport Policy 1, no. 1
(2009), 51 – 69; B. Houlihan, T.-C. Tan, and M. Green, ‘Policy Transfer and Learning from the
West: Elite Basketball Development in the People’s Republic of China’, Journal of Sport &
Social Issues 34, no. 1 (2010), 4 – 28; and B. Houlihan and M. Green, Comparative Elite Sport
Development (London/New York: Routledge, 2012).
3. J. Borland, ‘The Production of Professional Team Sports’, in W. Andreff and S. Szymanski
(eds), Handbook on the Economics of Sport (Northampton: Edward Elgar, 2006), 22 – 39.
4. G. Jarvie, Sport, Culture and Society: An Introduction (London/New York: Routledge,
2006), 99.
 1042 F. Huang and F. Hong

5. F.P. Jozsa, Sports Capitalism: The Foreign Business of American Professional Leagues
(Farnham: Ashgate, 2004), 109.
6. C. Cunningham, American Hoops: U.S. Men’s Olympic Basketball from Berlin to Beijing
(Lincoln: University of Nebraska Press, 2009), 319.
7. M. Jordan et al., The Official NBA Encyclopedia (New York: Doubleday, 2000), 187.
8. The research literature tends to refer to two dominant models of sport governance for
professional team (the North American and European models), though such a characterization
may actually mask the level of heterogeneity that exists particularly in Europe. A European
model is characterized by a tiered structure adopting a promotion and relegation system to
determine participation in a hierarchy of leagues or divisions, which is also known as an ‘open’
league. A North American model is characterized by its use of franchises and limited
membership, which is also known as a ‘closed’ league.
9. The CBMC was set up in 1998. The Competition Department under the CBMC has been in
charge of the professional league since then.
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10. C. Xu, Speech on the 1999 National Routine Meeting for Basketball (Beijing: Chinese
Basketball Association, 1999).
11. The name of Jiaji League was changed to CBAL in the 2003– 2004 season.
12. Y. Li, Speech on the 2004 National Routine Meeting for Basketball (Beijing: Chinese
Basketball Association, 2004).
13. CBA, North Star Project: The Ten Years’ Reform of Chinese Professional Basketball (2005 –
2014) (Internal Document) (Beijing: Chinese Basketball Association, 2004).
14. Ibid.
15. Ibid.
16. Y. Li, Speech on the 2nd Chinese Basketball Culture Forum (Internal Document) (Chinese
Basketball Culture Research Center: Digital Database, 2007).
17. Borland, ‘The Production of Professional Team Sports’, 22 – 39.
18. The term league has many different meanings in different areas around the world. Usually, a
league is a group of teams that play each other during the season. It is also often used for the
name of the governing body that oversees the league. To avoid confusion, the author will use
the term ‘association’ to indicate the governing body that oversees the league since both the
NBA and the CBA use this term.
19. Borland, ‘The Production of Professional Team Sports’, 22.
20. R.G. Noll, ‘The Organization of Sports Leagues’, Oxford Review of Economic Policy 19, no. 4
(2003), 530– 51.
21. Ibid.
22. Ibid.
23. CBA, Statutes of the Chinese Basketball Association (Beijing: Chinese Basketball Association,
1998).
24. CBMC, The Chinese Basketball Management Center, http://www.sport.gov.cn/n16/n33193/
n33223/n34901/index.html (accessed 8 July 2011).
25. CBA, North Star Project, 2004.
26. L. Xin, Speech on the 2008– 2009 CBAL Season Review Meeting (Beijing: Chinese Basketball
Association, 2009).
27. S. O’Sullivan, Economics: Principles in Action (Upper Saddle River, NJ: Prentice Hall, 2003),
283.
28. CBA, North Star Project, 2004.
29. CBA, The Full Schedule of the 2006– 2007 CBAL Season (Beijing: Chinese Basketball
Association, 2006).
30. CBA, The Full Schedule of the 2007– 2008 CBAL Season (Beijing: Chinese Basketball
Association, 2007).
31. Mou Zuoyun enjoys high prestige and commands universal respect as a major contributor to
the development of basketball in the PRC. The Asian Basketball Confederation awarded him a
‘Lifetime Achievement Award’ in June 1997. The CBA awarded him a ‘New China Basketball
Outstanding Contribution Award’.
32. O’Sullivan, Economics, 283.
33. S. Rosner and K. Shropshire, The Business of Sports (Burlington, MA: Jones & Bartlett
Learning, 2011), 3.
34. Ibid.
 The International Journal of the History of Sport 1043

35. CBA, Annual Report of the 2011– 2012 CBAL Season (Internal Document) (Beijing: Chinese
Basketball Association, 2012).
36. G.H. Sage, Power and Ideology in American Sport: A Critical Perspective (Champaign, IL:
Human Kinetics, 1998), 196.
37. O’Sullivan, Economics, 283.
38. K.G. Quinn, ‘Player Drafts in the Major North American Sports Leagues’, in B.R. Humphreys
and D.R. Howard (eds), The Business of Sports: Perspectives on the Sports Industry (Santa
Barbara, CA: ABC-CLIO, 2008), 191– 218.
39. Borland, ‘The Production of Professional Team Sports’, 22.
40. NBA and NBPA, Collective Bargaining Agreement 2005 (Beijing: National Basketball
Association and National Basketball Players Association, 2005); Quinn, ‘Player Drafts in the
Major North American Sports Leagues’, 191– 218.
41. NBA and NBPA, Collective Bargaining Agreement 2005.
42. A salary cap is a limit on the amount teams can spend on player contracts. The basic idea
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behind a salary cap is that a team can only sign a free agent if its total payroll will not exceed
the cap.
43. Under the reserve clause, although both the player’s obligation to play for the team and the
team’s obligation to pay the player are terminated, the player is not free to enter another
contract with another team. The player is bound to either negotiate a new contract to play
another year for the same team or to ask to be released or traded.
44. CBMC, Management Methods Relating to Basketball Player’s Registration and Mobility
(Beijing: Chinese Basketball Management Center, 2003).
45. CBA, Statutes of the Chinese Basketball Association, 1998.
46. CBA, North Star Project, 2004.