Aiming to curb excessive spending by CSL clubs, the policy dictates that domestic players' annual salaries will be restricted to 10 million yuan RMB (1.45 million US dollars) before tax, while annual salaries for foreign players must not exceed three million euros after tax.
Li Ming, general manager of Beijing Guoan FC, said this policy will be beneficial to teams' long-term development, reports Xinhua news agency.
"Having a salary cap can help teams develop more sustainably. Regulations are necessary in a professional environment," Ming said.
"The Chinese Football Association really values our opinions. They spent all day with us discussing how to make this new policy viable. It was the first time something like this has happened since I became manager of Guoan six years ago. I like how down-to-earth the current CFA people are," he added.
Wu Xiaohui, chairman of the board of Shanghai Shenhua, agreed with Li.
"They didn't try to push anything that we found hard to enforce. The CFA took our advice seriously."
Many of the league's smaller teams are in favour of the salary cap as it would not affect their finances so drastically. Yang Nan, chairman of the board of Henan Jianye, claimed he would only need to make adjustments to a few domestic players' contracts.
"Smaller football clubs can't function if they lose billions of RMB each year. I think having a salary cap can benefit us in the long run," he said.
Other new CFA policies for 2020 include allowing teams to have four international players on the field at the same time, up from the current three. The CFA hopes it will improve the quality of the matches and help domestic players become more competitive.
( With inputs from IANS )