China clubs need wage cap, youth fund - sports official

SHANGHAI (Reuters) - China's cash-flush soccer clubs need to establish salary caps and set up special funds to develop homegrown talent, a spokesman with the country's sports authority told state media on Thursday.

Driven by soccer-loving President Xi Jinping, China is using its financial might to invest in prestigious overseas clubs like Inter Milan, and its own teams are spending heavily to coax marquee players into the domestic game.

In the latest high-profile transfer, Shanghai SIPG signed Brazilian international Oscar from English club Chelsea in a deal said to make him the highest-paid player in the world.

But official news agency Xinhua said on Thursday that Chinese clubs have been "burning money" on the acquisition of expensive and overpaid foreign talent and have neglected the development of domestic players.

It cited an unnamed spokesman with the General Administration of Sport of China (GAS) as saying that China needed to introduce new measures to encourage homegrown talent.

"Set an upper spending limit for the acquisition of players and for player salaries... and conduct research into using a proportion of the clubs' spending on high-cost signings to establish a football development fund to be used for youth training," the spokesman was quoted as saying.

To help nurture "hundred-year clubs" rooted in local communities, China needed to put its teams under stricter financial supervision, and seriously insolvent clubs should be forced out of the league, the spokesman said.

He even suggested authorities could adjust the way points were awarded in each game in order to encourage homegrown talent to play a bigger role in matches, though he did not provide details on how this would work.

(Reporting by David Stanway; Editing by John O'Brien)