The deal of the art
Mainland auction houses operating in Hong Kong are registering strong performances in the face of tough competition from major international brands, as Chitralekha Basu reports.
Mainland auction houses finding success in highly competitive Hong Kong
Buyers from the Chinese mainland are increasingly on the radars of art dealers across the globe, and the phenomenon is probably most apparent in Hong Kong, which acts as a vital conduit between the mainland and the rest of the world.
According to Gary Yee, CEO of Art Serindia, a consultancy in Hong Kong, all auction houses — including big international players and homegrown Chinese brands — are now competing for the attention of mainland buyers.
While collectors from Europe and the United States seem to be on the back foot, their counterparts on the Chinese mainland are buying vigorously. Last year, buyers from Asia beat more-seasoned client bases in Europe and the Americas to claim 40.5 percent of global auction house sales, and 90 percent of them were from China, according to data from The European Fine Art Foundation. Today, China is home to an ever-expanding pool of collectors at the center of the global art market.
Hong Kong is often the first port of call for buyers from the Chinese mainland and, not entirely coincidentally, also the last. They come to assess some of the world’s most expensive paintings that will later go under the hammer in London or New York, and they comprise the bulk of consumers who buy from the city’s major auctions and art fairs. That Hong Kong doesn’t count art as a dutiable commodity and has one of the world’s most advanced logistics facilities make the city a great transit home for artworks connoisseurs acquire in the city.
In recent years, a sizeable proportion of the world’s art purchases has been linked to Hong Kong. What may come as a bit of a surprise, though, is that the stars of recordbreaking sales have often been overshadowed by the hype surrounding the runners-up. For example, Zhang Daqian’s ink and color painting Peach Blossom Spring made headlines when it sold for $34.7 million at Sotheby’s spring auctions in April last year, but the sale of Cui Ruzhuo’s The Grand Snowing Mountains the day before — fetching more than $39.5 million, a record price for a painting in the local market — at Poly Auction Hong Kong passed relatively unnoticed.
Poly Auction Hong Kong, a subsidiary of Beijing Poly International Auction, has been on a winning spree since it set up shop in the city in 2012. In fact, six out of 10 of the most expensive paintings purchased in Hong Kong were sold through Poly.
According to Artprice, a market survey and analysis portal, seven of the 10 most expensive pieces of art sold in Hong Kong last year were placed in the market by mainland auction houses, including Poly. Their success seems sweeter when one considers that many of the mainland auction houses currently making a splash in the Hong Kong market only arrived in the city in the past 20 years, whereas the multinational heavyweights have been around for much longer — Sotheby’s hosted its first Hong Kong sale in 1973 — and have been in business elsewhere since the 18th century.
On a firm footing
At a time when the performances of international auction industry heavyweights — Christie’s, Sotheby’s and Bonhams — don’t seem to be creating much upheaval in the local market, Poly Auction Hong Kong made HK$1.24 million ($158,000) at the last spring auction, a rise of 17 percent
Whereas Christie’s and Sotheby’s are more focused on just selling the top end of the market, we encourage all kinds of objects to be sold through us.” Nicholas Wilson, China Guardian Hong Kong
“Today, the community of buyers is far more informed than to go for something just because the words ‘Qing’ or ‘Ming’ are mentioned.” Edward Wilkinson, executive director of Bonhams Asia
since their last outing. Their highlight piece in spring last year, Wu Guanzhong’s landscape, The Zhou Village, which masterfully combines Chinese and modern European sensibilities, sold for HK$236 million.
Wu’s landscapes ruled Chinese auctions in Hong Kong this year, too. China Guardian, another auction house with mainland roots, sold one painting for HK$23 million, and its total haul by the end of this year’s spring auctions was HK$326 million.
Poly and China Guardian are in the vanguard of mainland auction houses that have quickly found a firm footing in the crowded Hong Kong art market. Other names in the reckoning include Hanhai Auction, Council (Kuangshi), ChengXuan Auctions, HuaChen Auctions and Sungari International Auction.
Now, more medium-sized auction houses from the mainland and Hong Kong are opening in the city. For all of them to coexist in a small space, it is necessary to develop niche interests, and
encourage clients to look beyond the familiar fare, according to Yee, who founded a local auction house several years ago but has since opened a consultancy that helps auction houses develop marketing strategies.
“I introduced Song Dynasty (960-1279) ceramics as a specialized category to the Hong Kong market in 2013,” he said. “Now, we are working with different auction houses to introduce archaic Chinese bronzes and ancient Silk Road art.”
“Silk Road” seems to be the dominant new phrase in Hong Kong’s auction scene, inspired, at least in part, by President Xi Jinping’s call to revive the ancient trade route that connected China with Central Asia and Europe. Nicholas Wilson, who heads the Chinese Ceramics and Works of Art Department at China Guardian Hong Kong, said his company hosted a symposium earlier this year “with the idea of promoting art that passed through the ancient Silk Road”.
Among the merchandize that may have traveled down that road were Gandharastyle Buddha sculptures with Greco-Roman features that flourished in the first and second centuries in the regions that are now in Pakistan and Afghanistan.
At China Guardian’s spring sales in May, Wilson sourced some rare specimens of Gandhara art, including a second century panel carved in black schist that depicts the death and funeral of the Buddha.
“Getting younger buyers on board has been a bit of a challenge,” he said. “But we’ve been trying to address that, educate newer buyers and show them that these pieces can be quite worthwhile even in a contemporary setting, and that they are really interesting historical pieces.”
Because they follow a different business model to Western auction houses, mainland outfits do not seem unduly anxious about attracting media attention. Many of their sales are achieved largely by building a relationship
of confidence and trust with clients that is sustained over years.
In addition to having good guanxi (relationships) with patrons it helps to cater to an audience that is not necessarily looking to buy big-ticket pieces.
“Whereas Christie’s and Sotheby’s are more focused on just selling the top end of the market, we encourage all kinds of objects to be sold through us,” Wilson said.
Although the leading mainland auction houses, such as China Guardian and Poly, now have bases in different parts of the world, they deal primarily in Chinese art and mainly cater to a Chinese audience.
“Typically, our clients are mainland Chinese with domiciles in other places. They buy with the money they earn abroad and keep the pieces outside of the mainland. And Hong Kong, of course, is a great place to store art. There’s no tax to pay and it’s easy to transport the pieces from here,” Wilson said, referring to the city’s advantage as the world’s largest container port.
Alex Chang, managing director of Poly Auction Hong Kong, attributed the stellar rise of his company’s profile in Hong Kong to the city’s strategic location and general openness. Doing business in the city helps him stay connected with his network of buyers in “Taiwan, Southeast Asia, Japan and South Korea, as well as a growing number of collectors from Europe and the United States”. According to Chan, the city’s “inclusive culture” is conducive to “healthy interactions between art galleries, art fairs and auction houses, which will further expand the market”.
The exposure to this confluence of art and ideas from around the world has inspired mainland auction houses to broaden their ranges. Chang said Poly has been offering “artists from Japan, South Korea and Southeast Asia, in which more and more Chinese and Asian collectors are showing interest”, while Wilson has plans to introduce mid-20 th century Scandinavian furniture created by Danish designer Hans Wegner who “did a couple of chairs based on Chinese designs”.
As more mainland auction houses emerge against the Hong Kong skyline and dip into a common pool of buyers, some observers are asking if there’s enough in terms of art and capital to sustain the current spate of energetic buying and selling in the long run.
“If there is anywhere in the world where there is a volume of collectors with the capacity to absorb a lot of art, I certainly think Hong Kong is one of those places because you have two massive populations, Chinese and Indian, sitting on Hong Kong’s doorstep, not to mention the rest of Southeast Asia,” said Edward Wilkinson, executive director of Bonhams Asia.
He believes Hong Kong is now an evolved marketplace: “Today, the community of buyers is far more informed than to go for something just because the words ‘Qing’ or ‘Ming’ are mentioned.”
“The presence of Chinese mainland auction houses in Hong Kong is a very positive thing for the market because it gives a clear indication that Hong Kong is a preferred city to conduct transactions in terms of the legal apparatus that’s in place, the rule of law and people having a feeling of safety and satisfaction,” he added.
In common with Wilson and Chang, Wilkinson thinks the way forward for auction houses doing business in Hong Kong is to look beyond art from the Chinese mainland.
“I am interested in seeing greater representation from, say, the Indian subcontinent or antiquities from Southeast Asia, all of which are barely represented here. For me, it’s an interesting space that has potential.”
Art enthusiasts check sales booklets at the China Guardian HK 2017 Spring Auction.
Last year, Wu Guanzhong’s TheZhouVillage sold for HK$236 million in Hong Kong.
A piece from Zeng Fanzhi’s MaskSeries1996, which fetched HK$105 million ($13.4 million).
Left and above: Two rare pieces of Gandhara art presented by China Guardian at its auction in May,
Poly Auction Hong Kong sold RainintheAutumn by Cui Ruzhuo for HK$142 million this year.