ARC: Regulatory Framework Needed in China

Racing in mainland China served as the topic for the seventh business session of the Asian Racing Conference in Mumbai Thursday, Jan. 28, a session that Hong Kong Jockey Club chief executive officer Winfried Engelbrecht-Bresges served as chairman.

"Since the last ARC in 2014, we have seen a significant increase in relevant activities associated with racing in the Mainland. For the healthy and sustainable development of racing and breeding in China, the number one priority is to establish a proper governance and regulatory framework," Engelbrecht-Bresges said. "The Hong Kong Jockey Club signed a horse industry cooperation agreement with the China Horse Industry Association (CHIA) to build a capability in establishing such a regulatory framework and also for veterinary care to ensure horse welfare. We also announced a strategic cooperation with the Chinese Equestrian Association (CEA) to share our technical acumen and implementation experience to enhance all aspects of racing control and regulations."

Andrew Harding, executive director of the HKJC racing authority, identified the systematic approach underway to support the development of racing in China. "The reality is that there is no shortage of hardware, but software is in much, much shorter supply," said Harding. 

"From this year, we will commence the training of locally recruited talent. You will surely appreciate that we are a natural partner to work in the development of this nascent sport," added Harding. "The club has a long history with contribution and engagement in mainland China. Relative to the future of racing, our partnerships have a broad compass, working in the areas of registration, drug testing, developing improved technical standards, the training officials, and many more."

Richard Cheung, HKJC executive director for customer and marketing, outlined the state of racecourse and racehorse owner development in China. Citing three waves of racecourse investments, Cheung described the path to the present.

"The first wave of racecourses with 'wagering missions' were asked to stop in the 1990s, before a second wave of racecourses operated with mostly 'wait and see' investments," Cheung said. "The third wave, however, is now growing, and coming back with a real racing interest. There is a clear re-emergence of interest in racing."

Jia Youling, president of the China Horse Industry Association, outlined the history of the CHIA and its administrative structure, confirming there are 30 racecourses in China and more being built. While China is home to more than 800 equestrian clubs and horse farms, growth is measured. 

"It is imperative the following rules be obeyed," Youling said. "To be listed in CHIA races, all race horses are registered, all race horses are immunized, and prohibited substance testing will be carried out on each race." 

Cheung identified the top 10 mainland based horse owners, stating that Hong Kong Jockey Club analysis suggests they own approximately 1,200 thoroughbreds combined. 

"Owners are becoming a shaping force in the industry, forming a non-profit organization known as the China Horse Owners Association designed to promote the legitimate interest of owners and a platform for the exchange of information between them," Cheung said.

Presenting a case study of the Rider Horse Group, Cheung stated the firm is likely to be the first equine enterprise listed on a Chinese stock exchange at some point in 2016 after obtaining venture capital investment and completing a Series D round of investment in June 2015. 

"RHG is aiming to cover the entire commercial horse value chain, including horse importing, racecourse and racing operation business, livestock trading, horse transport, the feed industry, and consultation services," Cheung said. "The path to sustainability and success are not clear at this point, but the development is more significant than most recognize."

Finally, Anthony Kelly, the HKJC executive director of racing business and operations, informed delegates of the club's significant growth in constructing the Conghua Training Centre. Following an aerial video of the property in its current state and depicting the future appearance of the site, Kelly expounded on the key support points of the project.

"Running more than 780 races a season and with a four-year waiting list in Hong Kong to become an owner, we are currently operating at capacity on our current land," Kelly said. "While development was delayed due to land slippage issues, main works recommenced in October 2015, and the main works contract is underway with site handover planned for March 2018. Horses and training are due to commence in July 2018."

The current plan suggests initial stabling capacity will be approximately 400 horses in the 2018-2019 season, increasing to nearly 700 by 2020. 

"The goal is to replicate Hong Kong's operating model in Conghua with respect to staffing levels and the quality of veterinary care," Kelly said. "We will source and train local staff for all manual and administrative functions, while work riders and track staff recruitment is already underway.

"When complete, Conghua will host barrier trials on a weekly basis and host racing carnivals, matching the world class standards of integrity and competition for which the Hong Kong Jockey Club is famous."