September 26, 2012

Chinese Auction Houses Fight For Credibility

Serious Chinese Collectors Spending Millions At International Auction Houses

Mainland Chinese collectors now dominate the market for Chinese traditional art and antiques

Though China’s domestic art and antique auction market surpassed the US this spring to become the world’s largest, the home-grown auction industry continues to suffer from a dearth of credibility, damaged by poor authentication standards, a lack of regulation, rampant non-payment and untested upstarts crowding the market. While domestic giants like China Guardian and Beijing Poly (which themselves are not without problems) start to make overseas forays — and the likes of Sotheby’s link up with Chinese partners to enter the mainland China market – it seems the authorities in Beijing are starting to realize that the development of a world-class auction industry will be impossible without raising standards and improving the health of the sector.

This week, the China Association of Auctioneers (CAA) announced the results of its year-long domestic market appraisal in an attempt to do just that, assessing home-grown auction houses with 114 standards, ranging from operations to management. Among China’s 309 registered antiques and artworks auction houses, the CAA looked at 74 applicants, ultimately honoring the country’s two largest, China Guardian and Poly, with management nods. As Zhang Zhongyi, deputy secretary-general of the China Association of Collectors, said this week of the industry appraisal process, ”It is an innovative attempt in the auction sector, which is of particular significance against a backdrop of lacking credibility.”

The Sotheby's name carries significant weight in the Greater China market

The consensus at the moment is that serious collectors will continue to do much of their buying at international auction houses in Hong Kong, Europe or North America rather than domestically unless something can be done to boost confidence. Though Chinese collectors do buy the occasional multi-million-dollar Qi Baishi or Li Keran at home, overall turnover is largely healthier at Sotheby’s Hong Kong than Beijing Poly. A lack of credibility among many domestic players has been pointed out as a factor in the lower overall auction turnover seen in the mainland China market this year, feeding bearishness about Guardian and Poly’s prospects within China this fall.

Meanwhile, Chinese collectors are still spending millions on art and antiques — they’re just doing more of that spending at credible, well-managed houses outside of the country.

Though Zhang Zhongyi told People’s Daily this week that the industry is improving, it’s still not enough as Chinese auction houses — some of which are offshoots of large-scale conglomerates — still prize quantity over quality. Said Zhang, ”[W]e need to improve the overall quality of the sector rather than its scale to help build century-old auctions houses with high credibility and fame.”

Art / Auction / Business & Finance / Culture / Investment / Market Trends / Policy
Tag: antiques, auction, auction market, auctioneer... , More
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