The on­go­ing rise of China Horse Club, part-own­ers of Cal­i­for­nia Chrome

The Star (St. Lucia) - - INTERNATIONAL - By Paul Haigh

The China Horse Club made news again after its pur­chase of a share in Breed­ers’ Cup Clas­sic favourite Cal­i­for­nia Chrome. The CHC, which had al­ready bought into Preak­ness win­ner Ex­ag­ger­a­tor ear­lier last year, has been mak­ing a mark in the in­dus­try for a while now. But who and what ex­actly is the CHC? Paul Haigh, who at­tended a race meet­ing it or­gan­ised in China, sheds some light.

The China Horse Club, cur­rently the world’s ninth high­est-ranked owner on the TRC Global Rank­ings, is a puz­zling phe­nom­e­non, par­tic­u­larly, per­haps, to Amer­i­cans.

This is not to say that the rest of the world, or even China it­self, can im­me­di­ately pi­geon­hole it. It is “an own­er­ship club”; “a group of syn­di­cates”; “a col­lec­tion of Chi­nese bil­lion­aires”; “a char­i­ta­ble or­gan­i­sa­tion within the Chi­nese main­land”; “an in­stru­ment that evan­ge­lises for racing in the world’s most pop­u­lous coun­try”.

It is also “a group that takes slightly built young horse en­thu­si­asts from dis­tant Chi­nese vil­lages and turns them into star jock­eys”; “an or­gan­i­sa­tion that now has top­class race­horses in ev­ery ma­jor racing coun­try”; “a life­style club ded­i­cated to im­prov­ing the ev­ery­day ex­pe­ri­ence of China’s new im­mensely rich”; or “a club which has al­ready, in just the three years of its ex­is­tence, owned or part-owned Horses of the Year in places as far apart as Europe (Aus­tralia, the horse) and Aus­tralia (the horse, Dis­si­dent).

Or are all these def­i­ni­tions in­cor­rect or in­ad­e­quate? Now, with the pur­chase of the win­ner of last year’s Dubai World Cup and the 2014 Ken­tucky Derby and Preak­ness Stakes, it looks as though the Club has a very rea­son­able chance of be­ing as­so­ci­ated with an­other Horse of the Year, this time in Amer­ica as Cal­i­for­nia Chrome has an out­stand­ing chance of win­ning the main Eclipse Award once again (he was U.S. Horse of the Year in 2014).

The Club bought into the Preak­ness win­ner Ex­ag­ger­a­tor after his sec­ond place in the Ken­tucky Derby and be­fore his vic­to­ries at Pim­lico and then at Mon­mouth in the Haskell. The CHC is all the things de­scribed in the first para­graph. And prob­a­bly a few more of which this writer is still ig­no­rant.

Racing in China is still un­able to de­velop as it has else­where be­cause of the pro­hi­bi­tion on gam­bling im­posed by Chair­man Mao in 1949, and still very much in force. This has meant that the cre­ation of an or­gan­i­sa­tion like the CHC, its very ex­is­tence in fact, re­quired a great deal of in­ge­nu­ity.

The man who pro­vided that in­ge­nu­ity is CHC chair­man and founder Teo Ah Khing, a Malaysia-born Chi­nese Har­vard grad­u­ate. Teo, the youngest of 10 chil­dren from the small town of Kuch­ing in Bor­neo, is an en­tirely self-made bil­lion­aire spe­cial­is­ing in ar­chi­tec­ture and con­struc­tion. He de­signed, and one of his Desert Star group of com­pa­nies built, Mey­dan for Sheikh Mo­hammed.

It was dur­ing the years it took to cre­ate Mey­dan that its ar­chi­tect dis­cov­ered his own en­thu­si­asm for racing and be­gan to work out a means by which his own coun­try’s wealth and long-stand­ing racing tra­di­tions could be com­bined to build, or re­build, the sport of Thoroughbred racing in China.

Teo’s own his­tory means his in­ge­nu­ity is not in doubt but, if he is so in­ge­nious, why did he choose the city of Or­dos in In­ner Mon­go­lia (a prov­ince of China not to be con­fused with the in­de­pen­dent coun­try of Mon­go­lia) to stage last year’s China Equine Cul­tural Fes­ti­val?

The CECF is an an­nual event that in­cludes a race meet­ing and is de­signed to raise en­thu­si­asm for all mat­ters equine as well as the sport of Thoroughbred racing in China.

Or­dos is rather a strange city. It was built to house sev­eral mil­lion at the height of a coal-min­ing boom in the region but now has only a frac­tion of the an­tic­i­pated num­ber of res­i­dents. New but largely un­oc­cu­pied tower blocks dom­i­nate its land­scape. Its streets are dom­i­nated by many fear­some stat­ues fea­tur­ing Genghis Khan, whose home­land this was.

Or­dos is 600 miles from Bei­jing and 200 miles from the edge of the Gobi Desert. In some parts of China its nick­name is “the ghost city”. It is not at first glance the sort of place you’d choose to stage a race meet­ing, or any event to which you’d want to at­tract a crowd.

Teo and the CHC saw its ad­van­tages though. For a start, at Yiqi, around 30 miles from what you might call the city cen­tre if you were cer­tain you could iden­tify it, Or­dos has a very fine race­course. For an­other thing, the region of Or­dos, and in­ner Mon­go­lia in gen­eral, has a tra­di­tion of ad­mi­ra­tion for the horse that dates back to the time when Genghis Khan (1261-1325) and his hordes con­quered most of the known world, an em­pire that stretched from Poland to the Pa­cific. An army that con­sisted al­most solely of mounted archers, they lived off the land in ev­ery way, tak­ing noth­ing with them but spare horses.

Genghis him­self may be re­mem­bered else­where as a ter­ri­fy­ing con­queror, but in his home­land he is ven­er­ated, and at least partly be­cause of that ven­er­a­tion, the horse is ven­er­ated too. (He did not take women with him, by the way, and a ridicu­lously high pro­por­tion of the world’s pop­u­la­tion has his blood flow­ing through its veins. DNA stud­ies sug­gest he may have as many as 32 mil­lion di­rect de­scen­dants scat­tered in the coun­tries he con­quered. Not even Eclipse has stats like that).

The third point is that Teo ob­tained from the Or­dos lo­cal govern­ment a long-term lease that en­abled the CHC to stage race meet­ings there for the next 15 years at least. This is of con­sid­er­able sig­nif­i­cance as it must have been ap­proved not just by lo­cal govern­ment, which may well have seen a chance of in­ject­ing new life into the city, but by cen­tral govern­ment too, which im­plies ap­proval for the CHC from Bei­jing.

The CHC has grand plans for In­ner Mon­go­lia. Not only does it wish to make Or­dos a base and fo­cal point for racing in China, it wants to cre­ate a breed­ing in­dus­try based on the nearby grass­lands, on the plau­si­ble the­ory that, if those grass­lands en­abled horses to thrive for the Khan, they should do the same for the Thoroughbred. The long-term aim is to match Ken­tucky as a base for Thoroughbred breed­ing. How long? 20 to 30 years is the cur­rent es­ti­mate.

It has grand plans wher­ever it goes, for that mat­ter. Shortly be­fore China’s rich be­gan to con­gre­gate for the CECF on Au­gust 20-21, it was an­nounced that Desert Star had signed a con­tract with the govern­ment of St Lu­cia to build on the is­land a re­sort, a race­course, and sta­bling for 1,000 horses.

To pro­vide phys­i­cal ev­i­dence of the re­al­ity of this am­bi­tious project, the Prime Min­is­ter of the Caribbean is­land, Allen Chas­tanet, was one of the guests of hon­our at Or­dos, along with WinS­tar’s El­liott Walden and John War­ren, newly ap­pointed chair­man of the China Horse Club’s In­ter­na­tional Ad­vi­sory Com­mit­tee, who - with his other hat on - is also racing man­ager to Bri­tain’s Queen El­iz­a­beth II.

Still there were scep­tics. How were they go­ing to get a crowd 600 miles from the near­est gen­uine conur­ba­tion, even if that does hap­pen to be Bei­jing? Would peo­ple travel the 600 miles? Would horselov­ing lo­cals re­ally come out in force? If they wanted solid over­seas me­dia rep­re­sen­ta­tion, why stage the event to clash with the York Ebor Fes­ti­val in Eng­land and Saratoga in the United States?

No prob­lems as it turned out. Or­dos has a fine in­ter­na­tional air­port, al­though the ab­sence of in­ter­na­tional flights does mean those from other con­ti­nents still have to do a fair bit of trav­el­ling even after they’ve touched down in China.

The clash with York and Saratoga mat­tered not one bit to the lo­cals, of course, but a fair rep­re­sen­ta­tion of journos from North Amer­ica, Bri­tain and Aus­trala­sia showed it was pos­si­ble to tear even the com­mit­ted away from those al­ter­na­tives.

CHC mem­bers came from all over the coun­try, an in­trigu­ing group in them­selves since, be­cause os­ten­ta­tious dis­play of wealth is frowned upon in mod­ern China, they dressed no more smartly than other race­go­ers, which may have been one rea­son Good­wood-style Panama hats were is­sued for all male, non­lo­cal guests to wear if they wished.

In­deed the choice of dates for the 2016 CECF may have been a typ­i­cally in­spired one, be­cause it meant the China Horse Club’s an­nual jam­boree be­came al­most part of the Na­mad fes­ti­val, a Mon­go­lian cel­e­bra­tion of long tra­di­tion that com­bines archery and wrestling with horse sports of ev­ery kind, which be­gan the fol­low­ing day.

A crowd of 26,000 at Yiqi, not one of whom so much as thought of hav­ing a bet, of course, was tes­ti­mony to the at­trac­tion of horse racing as pure sport in its own right. There was free en­try and free trans­port from the city, but whole fam­i­lies came on a day when there were only four races in all.

The fact that none of the 26,000 seemed to get even slightly bored or restive in blaz­ing 30 de­gree (90 fahren­heit) sun­shine said a lot about the en­ter­tain­ment be­tween races. This in­cluded fa­mous Mon­go­lian singers, dancers in tra­di­tional cos­tume, and an ex­tra­or­di­nary or­ches­tra of about 40 mu­si­cians, who all played an in­stru­ment called the horse-head sitar with such rau­cous bril­liance that even for­eign­ers who’d never heard the in­stru­ment be­fore found them­selves thrilled.

The Club misses no tricks when it comes to keep­ing a crowd happy. Miss China was there, look­ing as sump­tu­ous as you might ex­pect in a back­less cream dress, but no more won­der­ful than a group of ladies of about the same age - sort of CHC youth cheer­lead­ers - flown in spe­cially for the event with the ex­press pur­pose, one had to sup­pose, of pro­vid­ing proof that if Thoroughbred racing means any­thing to its East Asian devo­tees, it means glam­our.

Fire­works, an­other Chi­nese tra­di­tion, con­cluded the fes­tiv­i­ties. Hardly any­one left be­fore they were fin­ished.

The China Horse Club is a global phe­nom­e­non, but it is also a lo­cal one. Ac­cord­ing to CHC vice pres­i­dent Eden Har­ring­ton, live view­ing fig­ures on­line, mostly in China it­self but also this year in In­dia and South Africa too, topped one mil­lion, up 400,000 on last year’s record. The 26,000 was also a record for a race meet­ing held on the Chi­nese main­land - at least since the rev­o­lu­tion.

But the CHC’s am­bi­tions are as much fo­cused over­seas as they are within China it­self. The Club needs both to de­velop in order for it­self to thrive.

The coun­tries that top its list for pen­e­tra­tion are now Bri­tain, and to an even greater ex­tent (any­thing to do with Teo’s Har­vard ed­u­ca­tion?) the USA.

Amer­i­cans may be puz­zled by this new con­cept in own­er­ship. How do you get a group of around 300 bil­lion­aires to­gether, per­suade them that they want to pay US $1.25 mil­lion each as an an­nual sub­scrip­tion, with costs of pur­chase and train­ing on top, and keep the move­ment grow­ing?

You need a large pool of bil­lion­aires to be­gin with - and China has that, a deeper pool than the USA’s in fact. You also need suc­cess on the track, or the glam­our con­cept just isn’t go­ing to work.

The CHC has mostly young horses at the mo­ment. It hasn’t been around long enough to have rugged old warhorses in its port­fo­lio.

Ex­ag­ger­a­tor may have be­come a slight dis­ap­point­ment but, as a well-bred Ken­tucky Derby run­ner-up and Preak­ness win­ner who added the Haskell, he’s sure to have a fu­ture at stud, as of course should Cal­i­for­nia Chrome.

The Club has had five in­di­vid­ual win­ners in the USA in as many weeks, the most in­ter­est­ing of whom now may be the Bill Mott-trained Good Sa­mar­i­tan, who came from last in the ‘Win and You’re In’ Sum­mer Stakes at Wood­bine to re­tain his un­beaten record by an easy two lengths and will now prob­a­bly head di­rectly for the Breed­ers’ Cup Ju­ve­nile Turf.

It may take two or three years for the full im­pact of the CHC’s in­vest­ments at sales world­wide to be­come ev­i­dent in North Amer­ica, but Good Sa­mar­i­tan might pro­vide a good start.

Teo Ah Khing, Chair­man of Desert Star Hold­ings Ltd.

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