March Quarterly Bidding Wars Show That Market Has Recovered From Downturn; Contemporary Sales On The Upswing
Perhaps heartened by the higher-than-expected results at Asia Week in New York, where Sotheby’s took in US$22.6 million — including a record $2,994,500 for classical Chinese artist Bada Shanren’s “Two Mynas on a Rock” — Chinese auction houses expect to see a strong spring auction season. As Jing Daily noted last week, domestic Chinese auction houses like China Guardian have good reason to be optimistic — according to the most recent ArtTactic Chinese art survey, China Guardian and another mainland Chinese auction house, Hanhai, reported a 70% increase in volume between 2008-2009. Additionally, ArtTactic found that domestic Chinese auction houses are now able to source higher-quality artwork, meaning Sotheby’s and Christie’s are facing formidable rivals in the Asian auction market.
As China Radio International points out today, the smaller quarterly sales held in Beijing this month — generally considered “warm-ups” for the larger spring auctions to come — set new records, and these results along with unexpectedly strong turnover last autumn have injected new life into the auction market. From the article:
The regular and small-scale March quarterly auctions are usually considered as warm-ups for the big Spring auctions, most of which are scheduled to go under hammer in early June, and which are one of the two major auctions of the year.
China Guardian Auction claimed that the total sales of their quarterly auction from March 20 to 22 reached 260 million yuan, another record for the company, and a significant increase on last year’s March sales of 140 million yuan.
Beijing Poly Auction, another major auction house, announced nearly 120 million yuan in sales in its recent auction that wrapped up on March 25, compared with a miserly 40 million yuan for the same period last year.
Zhao Xu, executive director of the company, which will celebrate its fifth anniversary in June, told METRO that, “it shows a steady growth of the art auction market after the economic crisis, and that the auctions are attracting more people who want to invest in art.”
The article notes that Poly recently held its spring preview in Taipei, marking the first time that a mainland Chinese auction house has done so, and that the auction house has made five sourcing trips to the United States since last year. In addition to continued strength in the traditional Chinese art market, auction houses are banking on the continued recovery of the Chinese contemporary art market, which softened in the wake of the global economic crisis but is, according to ArtTactic, expected to fully recover within the next 18 months. (Perhaps sooner if Chinese “super-collectors” keep going well above estimates to get their hands on pieces they particularly like.)
[Growth in the Chinese auction market] seems very likely to continue, according to Wang Mingxian, a contemporary artist and professor from China Art Academy, who said that contemporary Chinese art, which created a big bubble that burst during the economic crisis, is now back on track.
“The prices for contemporary art may not repeat the crazy success of 2006 or 2007, but they are showing signs of rational recovery, although it will take a long time to fully recover,” he told METRO.
We’ll soon have our chance to see if Chinese contemporary art shows that it is indeed in the midst of a “rational recovery,” or if that recovery will come sooner than projected on the strength of mainland Chinese “New Collectors” or super-collectors like Liu Yiqian and Chen Yu. Interestingly enough, the China Radio International article concludes by pointing out the somewhat obvious but often understated reason that auction houses are so bullish on mainland Chinese art collectors — many of them have more faith in high-quality artwork as a long-term investment than they do in the stock market or “non-portable” investments like real estate.
As more money floods into the art auction market, some insiders said it is understandable as collecting high-quality art is much safer than other investments.
A manager from the marketing department of a major auction house, who preferred to remain anonymous, told METRO that as the outlook for real estate and the stock market is still uncertain, she saw some businessmen, who used to invest their money in real estate or stocks, turning to art as a less risky alternative.
As we wrote recently, the flight to relatively safer investments follows a historical and cultural predilection toward portable “hedges” in China. While art is only part of this, this helps to explain why so many Chinese collectors have entered the auction market in recent years, and why many more are sure to follow in years to come:
Much like gold and jewelry, which remain highly popular in China and have been a sort of traditional hedge against inflation there for centuries (despite occasional historical interruptions), art, fine wine, important watches and other auction prizes are seen by many in China as a great “portable hedge” that will hold or grow value in the face of inflation or gradual revaluation of the yuan.