China's financially struggling Guangzhou FC has announced a major pay cut and new salary cap for players ahead of the new soccer season.

An online notice from the club said the annual salary cap for a main player was being cut from 5 million yuan ($790,000) two years ago to 600,000 yuan before tax in the new season.

The starting annual salary for a first-team player was cut to 60,000 yuan, the notice said.

The cost-cutting move comes amid the club's money woes. Reports in recent months suggest that the club has been fighting for survival because of the precarious financial situation of Evergrande Group, the club's major investor.

The company said in its half-year report that the club was continuing to lose money because of players' salaries and high transfer and operating costs.

However, Xu Jiayin, chairman of the board of Evergrande, once a real estate behemoth, said in an internal meeting on Saturday that the company would continue to support the football business.

The Guangzhou team will be better positioned in the near future, Xu said.

Guangzhou FC terminated contracts with five international players last week. They had been paid significantly high salaries, according to sources in the club.

The Chinese Football Association implemented a strict spending and salary cap at all levels of the country's professional leagues since the 2021 season, aiming to curb investment bubbles and promote the healthy and sustainable development of professional soccer.

In the Chinese Super League, the pre-tax annual income of an overseas player should be no more than 3 million euros ($3.3 million).

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