China Has Overtaken United States As World’s Biggest Art Auction Market

It seems incredible that China is now the world’s leading art auction buyers. It was only in the 1980s that it opted for its own brand of free market economy and since then its economic take-off has been exponential.

The Chinese feat was recently confirmed by France’s authoritative auction body, Conseil des Ventes Volontaries. This emerging Asian super economic power now commands 34.3% of the global art market share, after its auction industry registered remarkable growth of 137% (Euro 7.6 billion) in 2010. In 2004, it overtook France in No.3 slot and ousted Britain as No.2 five years later. The French report covers sales in “art and other collectibles”, which goes beyond “fine art”. They comprise not only paintings, sculptures, drawings, engravings, photographs but would also include antique ceramics, other artifacts, jewelery and stamps.

The report also noted that Chinese collectors have been especially active in major auctions in the West too, buying back ancient Chinese artifacts, which have been chalking up record-breaking prices because of the scarcity of rare and outstanding pieces coming into the various auction houses. For example, in November 2010, an 18th century Qianlong vase, looted from the imperial collection by French and British troops when they sacked the Summer Palace in Beijing in 1860, fetched a staggering price of almost US$70 million at a London auction house sale.

The affluent Chinese art treasure buyers, both individuals and corporations, have made it a patriotic move to go after those treasures that were illegally stolen from China during the 19th century; their country was too weak and powerless to prevent invading foreigners from helping themselves to these war booties. They would have to pay millions of dollars for a single such acquisition and then donate it to the Chinese government for display at one of its leading museums. One example was the purchase and donation of a 18th century bronze ox head by Mr Stanley Ho, the mogul of Macao’s world-renowned casinos.

It is noteworthy that, out of the 25 top priced art objects sold at international auctions last year, 10 were bought by Chinese collectors. Even during the world financial turmoil in 2008, which affected China much less than elsewhere, the Chinese buyers were still actively collecting and reaping some very rare pickings as prices ebbed but not significantly.

International experts and auction houses believe that prices for exquisite antique pieces and paintings will continue to rise as their limited supply would not meet the insatiable demand of the growing number of super rich Chinese millionaires and those from the West to own them. They know that such works of art are a profitable investment, apart from being an enviable status symbol.

The Chinese royalty and other rich and powerful Chinese have had a long tradition of collecting works of art dating back to more than two thousand years. The First Emperor of China, Qin Shi Huang, was a celebrated collector and so were some of the Tang Dynasty emperors. But the most famous of them all was the scholarly and artistic Song Emperor Huizhong (1082-1135) who had accumulated thousands of pieces of superb works of art in his royal collection. This was subsequently enlarged by the succeeding Ming and Qing emperors.

Besides Emperor Huizhong, the other famed avid royal collector was the formidable Emperor Qianlong (1736-1796) who largely expanded the imperial collection during his long reign of 60 years. His collection of tens of thousands of varied art treasures of different eras was painstakingly catalogued and the choicest of these would be kept in his private study for him to gaze at and admire; the rest were stored within the precincts of his palace in Beijing under strict security. During his reign, China was enjoying a long period of peace and prosperity and its economy was by far the largest in the world.

Just before the defeat of the Chinese Nationalist regime by the Chinese communist forces in 1949, the bulk of the Chinese imperial collection amounting to about 80,000 pieces were removed to Taiwan, escorted by warships of the American Seventh Fleet across the Taiwan Straits. They are now housed in Taipei’s Gugong Museum complex, which has the largest and the best collection of Chinese art in the world.

With the founding of the People’s Republic of China in 1949, collecting Chinese art by individuals was frowned upon as a decadent pursuit of the rich. The collectors were encouraged to either donate them to the state as a patriotic gesture or to sell them to the Government at prices that were substantially below their intrinsic worth. Many did so and this greatly expanded the art resources of the state. Those who did not sell their high quality pieces and managed to keep them secretly until now, will be in for a bonanza if they now part with them by auctioning them in China.

In the early years of the communist rule, works of art were not greatly valued by the Government as there was still an abundance of them. On the other hand, Chinese works of art were much sought after in the West and in Asia; they became a vehicle of trade between China and these countries at the twice yearly Canton Trade Fair. China urgently needed foreign currency to import the necessary goods and equipment for its economic development. Foreign buyers eagerly snapped up the art pieces on offer as they were well below their international market value, especially the better pieces. In this way, much of China’s art pieces were depleted over the years and foreign buyers made a fortune reselling them in their home markets. The Government then passed a law prohibiting the sale and export of works of art produced earlier than certain period. To overcome this restriction, smuggling of these prohibited art pieces became widespread and they could be bought in Macao and Hong Kong by both local and foreign buyers. Consequently, much of these ended up overseas to satisfy the growing demand of international collectors who were prepared to pay increasingly higher prices for them.

The outflow of Chinese art treasures through international trade and smuggling activities were somewhat offset by the continuous discoveries of new ancient artifacts through government sponsored excavations of burial sites of royalty and nobility of different dynasties; these resulted in the recovery of an abundance of ancient artifacts, some of which had never come to light before or known to exist. The new discoveries have greatly enriched the museum collections in different parts of this vast country. It was the practice of ancient Chinese to bury with them their favourite earthly objects as funerary wares in their burial chambers for their needs in the hereafter. This had ensured their survival for posterity; had they remained above ground they would surely have perished.

As China became prosperous from the 1990s, the Chinese art dealers have been scouring the West and Asia (including Singapore) to buy back, at higher prices, what they sold to them earlier. They would then resell these in the home market at even more handsome prices as the Chinese art market has continued to boom and the demand for better quality pieces keeps on rising. It is estimated that there are about 4 or 5 million collectors in China today, both big and small. This is more than anywhere else in the world.

The Chinese auction houses have continued to grow in size and in volume of sales with no end in sight. Of the 10 biggest auction houses in the world, 5 are Chinese. Their supplies come not only from within China itself, but more and more from the West, Asia and elsewhere. Experts are confident that the Chinese auction industry will become even bigger than now in the years ahead, provided China’s economy continues to grow.

It looks likely that collectors of Chinese art everywhere who have high quality Chinese art works in their collections will profit even more from their exoteric hobby in the years ahead. So, do hold on to them and continue to enjoy them in the privacy of your own study in the mean time. They certainly look more attractive than your share certificates!

Lam Pin Foo

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One thought on “China Has Overtaken United States As World’s Biggest Art Auction Market

  1. I have an Authentic Snuff Bottle from what I believe may be around the Qing Dynasty or older that I would like to sell . It is Authentic. Some Dealers are paying up to 10,000.00 dollars for these snuff bottles, as they are painted on the Inside of the bottle, rather than the outside and some are adorned with Ruby and other gemstones. Serious inquirers may reach me at jpbusby@earthlink.net. Otherwise, I may list it on Ebay. Thank you. Judy

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