Illustration: Chen Xia/GT
The autumn auction season is expected to be red hot once again this year, thanks in large part to big-spending Chinese collectors. Earlier this month, Sotheby’s wrapped up its five-day fall auction in Hong Kong on October 8 with a record HK$4.19 billion ($542 million) in jewelry, antiques and contemporary art falling under the hammer. And many also anticipate Christie’s auction in the city to be just as successful next month.
But top Chinese buyers are not just limiting their sights to Hong Kong. Many are now eager and active participants in the global art and antique scene, where they continue to place sky-high bids for ancient Chinese artifacts and objets d'art.
In November 2010, a Chinese businessman paid 51.6 million pounds ($83.4 million) for a Qing Dynasty (1644-1911) bottle up for auction in the UK. In April 2011, a piece of imperial jade reportedly dedicated to Emperor Qianlong (1711-1799) went for 2 million euros ($2.7 million) in France, shattering earlier estimates which valued the object within the 300,000 to 400,000 euro range. The following month, a Qianlong jade seal and the fourth scroll of The Grand Review sold for similarly massive sums.
Much has changed in the Asian art and antiques market since the 1970s and 1980s, when most auctions of Chinese artifacts were held in the West and dominated by North American and European buyers. It wasn't until the 1990s that larger cities in China, like Beijing and Shanghai, started to conduct similar auctions catering to newly affluent local collectors. But by the late 2000s, Chinese buyers had already become fixtures in major auctions in New York and London.
In the eyes of many Western bidders, their moneyed Chinese peers are spoiling the international auction scene with their oversized bids and a seemingly insatiable appetite for all things Chinese.
Here at home though, the situation is viewed differently. There is a growing sense that rich Chinese are buying back their cultural heritage out of a sense of national pride. But as such notions pick up traction with the media and the general public, it's becoming apparent that "patriotic" motives are clouding a complex phenomenon with implications far beyond the art market.
Most local buyers are keen to purchase antiques because they see these artifacts first-and-foremost as investments. Few of these collectors are really interested in the intrinsic cultural, historical or artistic value of the objects they buy. Members of this group are often the most zealous participants in auctions held overseas, where reputable auction houses and well developed legal systems can offer bidders protection from forgeries - fakes being still all-too-common in the immature Chinese market.
Meanwhile, the complexity inherent in regulating a market where value is so subjective has created numerous opportunities for the unscrupulous. There have been reports, for instance, that some Chinese groups have illegally transported low-value, poor-quality artifacts overseas and then overbid on them when they go on the block at famous-name auction houses. After having their value thoroughly manipulated, these objects can then be shipped back into China and sold off for a hefty profit among local collectors.
Auction houses are also at risk of becoming channels for money laundering. Individuals making anonymous bids worth millions of yuan could convert their ill-gotten cash into an artifact which can then be sold off in the lightly regulated antique market.
Obviously, this phenomenon bears enormous financial implications for China. Chinese buyers are transporting vast fortunes via international auction blocks. Just looking at the accumulated bid totals racked up at recent Hong Kong auctions conducted by Christie's and Sotheby's, it's clear that tens of billions of yuan have been sent offshore to buy antiques over the past half decade.
Chinese authorities should be aware of the large sums circulating in the global antique market and not let facile beliefs about "patriotism" cloud their scrutiny.
The author is the chief research fellow with Beijing-based private strategic think tank Anbound. firstname.lastname@example.org