No taping or recording, no local officials in attendance, and no publicity during meetings.
Among the tens of thousands of business associations in China over the past decades, there have been many with enormous clout, but few that are as powerful and mysterious as the Taishan Club (泰山会).
The Taishan Club was established in the summer of 1994 and dissolved in January 2021. According to reports, the Taishan Club submitted to the authorities early this year the paperwork to dissolve.
Just like that, it seems certain that a legendary alliance of 27 years has been disbanded.
However, the core members of this group like Subor and BBK founder Duan Yongping, Baidu co-founder Li Yanhong, Lenovo founder Liu Chuanzhi, Vantone head Feng Lun, Fosun chairman and co-founder Guo Guangchang, remain highly visible.
The rules were rudimentary and simple: a minimum worth of 100 million RMB to join, and the group would only grow by one member per year.
From an in-group of technopreneurs to something more
As the gathering ground for China’s first batch of people who made their wealth through capitalism, the Taishan Club may be no more, but the legends of these people are far from over.
The Taishan Club began as a group of four, including Chen Chunxian, founder of “China's Silicon Valley” Zhongguancun; Stone Group chairman and Zhongguancun pioneer Duan Yongji; China’s computer trading pioneer Chen Qingzhen; and Jinghai Group chairman and Zhongguancun pioneer Wang Hongde.
From 1984 to 1987, the Taishan Club started to grow rapidly, during which many tech company leaders joined, and the “small” Taishan Club expanded to dozens of people.
However, looking at the founding members and those who joined later, it is apparent that the Taishan Club was very different from most business associations. In 1980s China, the meetings of these people were at most tech sector “salons”, with varying financial levels among members. They had little capital and were not capable of making waves in the capital market.
Perhaps seeing its constraints, Duan Yongji started to act to make the Taishan Club powerful.
In 1993, Duan Yongji’s Stone Group was listed in Hong Kong, raising 320 million RMB to become the first private tech company to be listed. At the same time, Duan Yongji started plans to build a small, elite circle of entrepreneurs.
The rules were rudimentary and simple: a minimum worth of 100 million RMB to join, and the group would only grow by one member per year.
This criterion was implemented, and the Taishan Club was reduced to 16, a private circle of entrepreneurs in the true sense. At the time, an organisation called the “Taishan Industry Research Association” (泰山产业研究会) was registered in Weifang, Shandong with Duan Yongji as director and Liu Chuanzhi as association head.
The Taishan Club (泰山会) was named after Mount Tai (Taishan), known as the chief of China’s top five mountains. And it can be said that in the decades following the group’s establishment, there were many examples of its members that perfectly exemplified the concept of Mount Tai.
Secretive power huddles
Strictly no taping or recording, no local officials in attendance, and no publicity during meetings — the agreement reached when the Taishan Club was first established endowed this group with a sense of mystery.
However, with growing membership and power came great influence, and the Taishan Club became a frequent topic of discussion. In fact, most of its members were industry leaders in China, and their companies combined would form a powerful industry chain.
Public information shows that before the Taishan Club was disbanded, it had 16 members: Liu Chuanzhi (Lenovo), Duan Yongji (Stone), Feng Lun (Vantone), Lu Zhiqiang (Oceanwide), Guo Guangchang (Fosun), Zhang Yue (Broad), Lin Rongqiang (Xinyuan), Shi Yuzhu (Giant), Li Yanhong (Baidu), Duan Yongping (BBK), Chen Qingzhen (ScienceSea), Zheng Yuewen (Creat), Wang Yuansi (Henan Star), Xu Wenrong (Hengdian), Wu Li (Dawncom), and Wang Zhongjun (Huayi Brothers).
Some views note that on the surface, the Taishan Club was just a community group made up of business people; however, on a deeper level, it was really a typical group of elite capitalist tycoons, a gathering ground for capitalists that was representative of China’s capitalist strength on the ground.
To take it further, the ultimate aim of establishing such a group was fundamentally the same as capital operations: pursuit of profits, monopoly, removal of free competition, creation of common interests, and finally control of the market where the winner takes all.
What created Taishan Club’s power?
In terms of organisational structure, the strong bond and appeal of the highly sophisticated Taishan Club was a result of its scrupulously selected membership.
Since the selection criteria were first established, the threshold for entry to the Taishan Club was extremely high; only entrepreneurs who were worth at least 100 million RMB and whose companies are of a certain scale could join. This was completely different from most business associations.
Besides, the Taishan Club worked on recommendations, and only worked with “familiar” people. New members had to be recommended by two existing members, and passed by unanimous votes by all members. Just one opposing vote, and the candidate would not be approved. And if a member could not make it for a meeting, they would have to take a leave of absence and pay a fee of 10,000 RMB.
...the ferocious Taiwanese media locked on the Taishan Club members and filed reports, and for the first time there were public images and information exposing the club’s schedule and creating a stir.
The Taishan Club also had a NATO-style agreement that if any member was in crisis, the other members would help as much as possible.
Rumour has it that the Taishan Club met twice a year with members taking turns to host. And during meetings, experts and authorities on a subject would be invited to contribute ideas. For example, Wu Jinglian and other economists were once invited to forecast economic trends and analyse the report of the National Congress in order to get a better sense of the country’s direction and policies.
However, for such a tightly organised business association, its members kept a very low profile, saying that it was just a gathering of old men for tea. And as the Taishan Club kept its secrets well, little was known about it.
Until 2013.
On 16 November that year, the 16 Taishan Club members had a low-key gathering in Taiwan to celebrate the club’s 20th anniversary amid strict secrecy, so much so that even the welcome banner at the hotel they stayed at was taken down.
However, the ferocious Taiwanese media locked on the Taishan Club members and filed reports, and for the first time there were public images and information exposing the club’s schedule and creating a stir.
Familiar big-name veterans like Feng Lun, Lu Zhigang, Liu Chuanzhi, Guo Guangchang, Shi Yuzhu, Duan Yongji, and Wang Zhongjun created a powerful group: these people practically had a monopoly on the top resources for China’s major sectors, and even had a total asset worth several times higher than Taiwan’s annual budget.
According to reports, the group was mainly in Taiwan to celebrate the 20th anniversary of the Taishan Club, and also to try Taiwan’s food, experience Taiwan life, and make sense of the “spirit of the Third Plenary Session of the 18th Chinese Communist Party Central Committee”, while discussing and exchanging views on China’s economic direction.
But from another perspective, for a group that gathered China’s elite businessmen, the quieter their doings, the greater the speculation.
One characteristic of the Taishan Club was that members would help one another when there was a problem.
High-powered networking
What were they doing?
“In the Taishan Club, everyone has who they want to work with.”
Liu Chuanzhi once said frankly that a helping hand at crucial times made the bonds in the Taishan Club a sort of business deal.
One characteristic of the Taishan Club was that members would help one another when there was a problem. Even with all the speculation and amid the cruel business competition, for decades these business titans banded together, truly going through thick and thin together.
The best known example is the rescue of Shi Yuzhu.
At the time, Shi wanted to construct a building in Zhuhai, but the Taishan Club members did not approve. Later, Shi was deep in debt due to the Giant Tower, and the Taishan members came together to help. With the help of Duan Yongji, Shi made a comeback. Subsequently, Shi rebranded melatonin as “brain platinum” (脑白金), creating a fad.
In 1995, housing was being commercialised, and Lu Zhiqiang, Liu Chuanzhi, Duan Yongji established Guangcai Enterprise Investment Management Co. (光彩事业投资治理有限公司). With its acquisition of Nanyou Property, the company made these people buckets of money.
But by 2005, Lu’s Oceanwide Holdings had bought up too much land, causing problems for the market, coupled with the law of 31 August 2004 stating that all land intended for commercial projects had to be put on open auction. At this crucial point, Liu Chuanzhi put in a large amount of money to tide Lu Zhiqiang through this difficult time.
Another well-known example happened in 2009.
That year, Wang Jianlin (Wanda) — who already owned over 200 Wanda Plazas — suddenly started another project called the Changbaishan International Resort.
But as the project was too large, Wang did not have enough money and immediately asked for help from the Taishan Club. In 2011, Taishan members including Lu Zhiqiang and Liu Chuanzhi provided capital and built the Changbaishan International Resort with Wang.
With the backing of the Taishan Club, the value of this 200-million RMB ski resort went up hundredfold after a few years, becoming a titanic project.
...with China's current anti-monopoly efforts, a super-elite private business group like the Taishan Club with its high entry threshold, internal resources and communication, and control over businesses would be suspected of going against fair market competition.
A friend in crisis and opportunity
Cases of mutual assistance became the trademark of the Taishan Club. These people with rich resources in various sectors selected the most trustworthy “comrades” through the tightest and highest criteria. They came together in crisis and opportunity, becoming a formidable force.
But as things rise, so do they fall, according to natural order.
For the Taishan Club, from its peak to its gradual decline and dissolution, the reasons are complex.
From a macro perspective, whether it was to contain hot capital or a reevaluation of values about capital, in recent years the conditions for the existence of the Taishan Club were shaken.
More importantly, with China's current anti-monopoly efforts, a super-elite private business group like the Taishan Club with its high entry threshold, internal resources and communication, and control over businesses would be suspected of going against fair market competition.
At the same time, previous Taishan Club members also faced more complex business challenges in the new era, with many crises that quietly changed their fates.
In March 2019, Shi Yuzhu’s “disciple” Tang Jun — who once spent 2.32 million RMB for a meal with Shi — was jailed for illegal fundraising through his company Tuandai.com.
The market imploded, as Shi’s Giant Network was the main investor during the A and B round funding for Tuandai.com.
Amid the storm, Giant Network’s profit for 2019 was down 30% over the previous year, and Shi’s worth shrank by nearly 2 billion RMB.
Wang Jianlin also went through a similar devastating experience. The 23 billion RMB Changbaishan International Resort followed by a wave of conservation inspections left him with just an illegally constructed golf course and a collection of broken down chalets.
Impacted by e-commerce, the debt-ridden Wanda group sold its physical holdings and wanted to develop its e-business, but did not do well surrounded by internet giants. Even Wang Jianlin’s son Wang Sicong came under law enforcement by the courts at intervals; father and son did not have an easy time.
Coupled with the increasingly complicated conflicts of interest within the Taishan Club, differences between members were long in the making; they got together and grew apart because of interests.
Lu Zhiqiang’s situation also did not look good. As of 2018, his Oceanwide Holdings owed over 50 billion RMB — 2 billion RMB in annual interest alone.
Previous investors also started to dry up in terms of funds. To clear his debts, Lu Zhiqiang could only sell off the prime site for his Oceanwide international project in Beijing’s Chaoyang district as well as the Dongjiadu project in Shanghai’s central Huangpu district at the low price of 12.6 billion RMB.
Coupled with the increasingly complicated conflicts of interest within the Taishan Club, differences between members were long in the making; they got together and grew apart because of interests. The peaceful dissolution of the weathered Taishan Club was in fact the ideal ending.
Everything is a footnote in history.
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