Christie's Signs Groundbreaking Deal To Hold Auctions On Mainland

Auction House Manages To Avoid Government's Usual Joint Venture Requirement Christie's CEO Steven Murphy in Hong Kong on November 22, 2012. (South China Morning Post) In a major development for the role of international auction houses in China, Christie’s announced Tuesday that it will be the first non-Chinese auction company to operate on the mainland independent of a joint venture partner. “Our launch in China will be a ‘game changer’ and it’s all about right timing, right conditions, with [the] right people,” said Christie's CEO Steven Murphy to the South China Morning Post. The company signed an agreement with the city of Shanghai, giving it a 30-year “comprehensive auction license” to sell art, wine, and other luxury items anywhere in China as long as they don’t fall under the Chinese government's definition of "cultural relics." The license provides Christie’s with the rights to offer regular exhibitions, import and export art, and provide training. The announcement comes on the heels of Sotheby’s September 2012 joint venture deal with Chinese state-owned Gehua Cultural Development Group on a 10-year contract. Sotheby's, Christie's main international competitor, holds an 80 percent stake in the venture. It is possible that the new push into the mainland is a response to the Sotheby's announcement, as Christie's told The New York Times that the application for the license was filed sometime last year. However, according to a Wall Street Journal interview with President of Christie's Asia François Curiel, this plan had been in the works for at least three years. Christie's is no stranger to operating on the mainland. Almost 20 years ago, the auction house opened China's first international auction representative office in Shanghai. Before Sotheby's joint venture, Christie's had previously licensed its name to Chinese auction house Forever since 2005. This agreement met with with mixed results and as of this coming September, Christie's will no longer work with Forever. Several months ago, Christie's also introduced its art education program to China in partnership with the China Europe International Business School. Relations between Christie's and the Chinese government have not always been smooth. In 2009, Chinese officials demanded that the company forgo selling a set of bronze sculptures that had been looted from the Summer Palace in 1860. The following year, Christie's managed to smooth things over by apologizing for the incident and forming a partnership with China's Ministry of Culture in which it funded the exhibition of state-approved artwork. When asked about the incident's effect on current negotiations, Curiel said that the issue was not even brought up. "Scars heal," he stated. Christie's enthusiasm to tap directly into the Chinese art market is understandable. Not only is it the second-largest (and fastest-growing), but a return to its status as the largest that it held in 2011 is constantly looming. The number of Christie's mainland clients has doubled since 2008, despite the fact that buyers returning from overseas are required to pay heavy import duties for goods purchased. “Chinese collectors, especially those new to the art market, will have the opportunity to participate in our auctions without having to travel overseas,” said Murphy. Christie’s new mainland perch will also put it head-to-head with China's two largest auction houses, Beijing Poly International and China Guardian. Because these companies have had issues with fake goods, smuggling, and accusations of price manipulation, the combination of Christie's international reputation and new domestic access may turn it into a formidable challenger.

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Christie's Signs Groundbreaking Deal To Hold Auctions On Mainland