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.

China Daily (Hong Kong) - - FRONT PAGE - Con­tact the writer at basu@chi­nadai­lyhk.com

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.”

Sus­tained re­la­tion­ships

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”.

Wider hori­zons

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.”

PHO­TOS PRO­VIDED TO CHINA DAILY

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.

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