BEIJING -- For the first time in history, the Chinese Basketball Association (CBA) league will introduce a salary cap for the coming 2020-2021 season.

According to the latest rule, the total salary for domestic players should stay between 20 million RMB (about 2,960,000 US dollars) and 44 million RMB (about 6,512,000 US dollars). After the conclusion of the season, the league will reassess the pay structure. Any amount over 44 million RMB or below 20 million RMB will be charged a luxury tax of 25 percent.

"We are confident in the system," said Zhang Chi, head of the CBA's Player Development Department.

"It's an agreement by our clubs and investors. We are expecting to help them get reasonable control of the spending. Besides that, all of us want a more balanced league. Under the cap, the teams are encouraged to pay more attention to their youth training system instead of buying players."

Though affected by the COVID-19 pandemic, the past CBA season was regarded as a remarkable one in the league's 25-year history.

In April 2019, CBA president Yao Ming and the league disclosed the "CBA 2.0" plan, which was designed to upgrade the league in many ways. According to data from China Central Television, the viewing numbers of the 2020 regular season surpassed those of the regular season plus playoffs of previous seasons.

With more eyes on the league last season, the commercial value of the product increased considerably. On the other hand, this rapid commercial growth has also led to a significant increase in player salaries, which has begun to put pressure on the finances of clubs.

"The salary cap policy is fair to each club," said Zhu Fangyu, general manager of Guangdong Southern Tigers.

"The cap is like a brake to the cost of salary, which has been increasing too fast in recent years. We all need a balanced league because the players' income will finally be effected if the club keeps losing money."

"It's a fact that most CBA clubs are operating at a loss," a source told Xinhua. "The average loss can reach tens of millions of RMB per year."

In the coming season, the contract of CBA players will be classified into five types, which are labeled A, B, C, D and E. The D contract is the maximum-salary contract, and a club can offer a maximum of three D contracts. Currently, 25 CBA players are on D contracts, including most of Chinese basketball's big names such as Yi Jianlian, Guo Ailun and Ding Yanyuhang.

Along with the salary cap for domestic players, there is another "cap" for foreign players. A CBA club can spend no more than 7,000,000 US dollars on signing foreign players.

"The cap is an achievement for the league, but it's far from perfect," said Zhang.

"We welcome any criticism, and I believe we can find solutions to all the problems."