DreamCenter, an entertainment and business compound to be built by DreamWorks Animation, Hong Kong’s Lan Kwai Fong Group and Shanghai China Media Capital, is one of the planned landmarks of the West Bund – the new name for a long stretch of industrial waterfront in Xuhui district where a number of museums and galleries have already opened.

The transformation of the storage tanks will cost at least 100 million yuan (HK$115 million), Qiao says. Shanghai is relying on private sector support to pursue its dream of turning the West Bund into China’s equivalent of London’s Southbank and the Rive Gauche in Paris. Two other private collectors opened museums in the district in 2014 – Long Museum (West Bund branch) and Yuz Museum.

Running even a medium-sized museum in Shanghai costs millions of yuan per month and, unlike in the West, there are few tax concessions and little direct funding from the state. Qiao says he has yet to finalise the financial model that will keep Tank Shanghai sustainable.

“Art museums are cost centres and very hard to sustain. The site is rented so there’s no collateral to secure a bank loan,” he says. Instead, he is counting on corporate sponsorship in the mould of the support given by UBS and Phillips for the first exhibition at Qiao Space, the temporary exhibition venue he has rented in the West Bund area near the Tanks site.

It may be a fool’s errand to open a private museum, so why do it? “I love art with a passion, so I support the government’s desire to promote art to the public,” he says, not giving much away.

Many private museums in China are opened with the aim of gaining government approval for property developments; the cultural element tends to appeal to regulators. But Tank Shanghai is not one of those.

His acquisition of works by world-famous artists and his grand Shanghai project have certainly launched Qiao into the jet-setting upper echelon of the art world. After the September opening of “Studio”, the first show in Qiao Space, he flew to New York for one night to view Oscar Murillo’s latest collection at David Zwirner’s gallery, before dashing back to Beijing for the star-studded launch of Zeng Fanzhi’s Parcours exhibition at the Ullens Centre for Contemporary Art.

The Beijing native says he comes from a modest background and was trained as a sound engineer, which landed him a job in a Hainan Island nightclub in the 1980s, back when everything was loosening up. “I was just a staff engineer. I remember taking care of the sound systems when [Hong Kong musicians] Sandy Lam and Grasshopper came to perform. Later, I opened my own nightclub there and made my first pot of gold,” he says. He now has three nightclubs – in Hainan, Beijing and Shanghai.

Qiao is not as guarded as of many of China’s super collectors. He dresses and speaks quietly, and is matter-of-fact about his collecting. He started buying art 10 years ago, initially to fill the wall space in his nightclubs. Remarkably, his attempt at interior design has yielded an enviable collection, with some of the best-known names in Chinese and Western contemporary art.

The inaugural exhibition at Qiao Space, a multimedia exploration of artists’ relationships with their studios, is a tour-de-force. Participants include Ding Yi, Liu Wei, Liu Xiaodong, Xu Zhen, Zeng Fanzhi, Zhang Xiaogang and Zhang Enli, who painted a fresco on the outside walls of the mezzanine office. Qiao has bought works by all of them, as well as Western artists including Antony Gormley, Olafur Eliasson, Sterling Ruby and Theaster Gates.

“I like art that strikes a chord with my experiences, that inspires or moves me. I trust my own feelings and I don’t hire a team of advisers,” he says.

To fully appreciate Qiao’s collection, one has to travel to another part of the city. Until Tank Shanghai is ready, the bulk of his collection – about 70 pieces – is on display at Shanghai Night, his four-storey flagship KTV nightclub, miles away from the fashionably grungy Qiao Space, where trendy, young curators tap away at their MacBooks. The part of the city where Shanghai Night stands is more grubby than grungy; for anyone visiting the nightclub to see art, the setting will come as a shock.

It has a traditional, neon-lit façade reminiscent of Macau and old Tsim Sha Tsui East entertainment venues. The first sight upon entering is a lifelike sculpture of a naked African woman in bondage suspended by ropes from the high ceiling. The work is called Play, a typically complex piece by MadeIn Company Xu Zhen that mixes postcolonial sentiments with Japanese shibari (rope bondage) Since it is hanging above an illuminated purple panel, uninformed visitors will only see a silhouette that appears to ridicule the hundreds of pale, tired-looking hostesses strutting around the venue in ill-fitting evening dresses.

Next to the entrance is a mini Event Horizon moment – a sculpture of a man by Gormley perched on top of a wall. Upstairs, clients’ loud, drunken karaoke singing emanates from the 90 private rooms where guests are accompanied by pretty women – essential at this venue.

There’s art on every single wall. Ai Weiwei’s bicycle sculpture and Ding Yi’s crosses compete for space with Thomas Houseago’s skull-like mask paintings. The art feels out of place, invisible to the troops of young women who keep eyes glued to their smartphones as they wait their turn. Why?

“I like the contrast. You can view art in a harmonious environment, or you can view art in a place that provides a very strong contrast and gives it a very different meaning,” he says. “I don’t believe you should just put contemporary art in museums, in white-cube galleries. Contemporary art is about real lives, the real world; so the nightclub setting is pretty appropriate,” he suggests cynically. As for the dangling naked woman, he says it just “seems fun”.

The debasement of women is so over the top in some paintings that it is impossible not to see them as unflattering comments on the nightclub’s clientele. In Chen Fei’s Stepfather (2013), for example, a man in a loose dressing gown offers a young woman a hotdog with his penis in it.

Qiao is adamant the works by famous artists are not intended to clean up the image of an unwholesome business – he admits that nightclubs exist in a legal “grey” area in mainland China. “Art is purely my hobby. My collection is not put there for my customers. It’s simply my private museum, not a public gallery space,” he says.

It is certainly different. Many of the artists he collects have come to visit, as have luminaries from the art world such as Frances Morris from the Tate Modern. Houseago has posed for photographs on top of one of the oil tanks.

“Whatever people think about this space, the art is alive here. A lot of people come and visit, which helps promote the artists. At the end of the day, I want to help the artists. They wouldn’t work with me otherwise. They trust me. They know I’m not a short-term speculator. They know I won’t do anything to hurt them and that I will attract the right kind of audience,” he says.