Chinese Art Sales Tallied $8.5 Billion in 2013 on Rebound

08:46 | 11/10/2014

A pair of Chinese porcelain vases fetched $1.2 million; a 7-inch-tall celadon vase sold for $2.3 million and a bronze Buddha statue went for $485,000 -- all blowing past their presale estimates many times over.

So went the buying spree during Asia Week in New York this week as Chinese dealers and collectors packed the salesrooms and snapped up pieces of their cultural heritage. Auctions at Sotheby’s, Christie’s, Bonhams and Doyle New York are expected to tally $95 million.

The Chinese art market is regaining strength after sales plummeted 43 percent to $6.6 billion in 2012, according to a study published today by New York-based researcher Artnet and the China Association of Auctioneers, which represents top Chinese auction houses and has 2,500 members.

Public auctions of Chinese artworks globally tallied $8.5 billion in 2013, up 29 percent from the previous year, but short of the $11.5 billion peak in 2011, according to the “Global Chinese Art Auction Market Report 2013.” Mainland China accounted for 73 percent of all Chinese art and antiques sales in 2013.

“The market has improved quite substantially,” Clare McAndrew, an art economist who wrote the report’s introduction, said in a telephone interview. “It’s a much slower growth. You won’t see things like you saw in 2010-2011.”

Source: Sotheby's Hong Kong via Bloomberg

The expansion of China’s art market -- in Mainland China, sales increased by more than 500 percent from 2008 to 2011 -- has been accompanied by the proliferation of fakes, late payments and non-payments. These issues have discouraged new buyers and undermined credibility of Chinese auction houses.

As of May 31, 2013, 44 percent of lots sold by licensed auction houses in China during 2012 had not been fully paid for, according to the report.

For the report, the auction association vetted the results by China’s 382 licensed auction houses listed in the appendix.

“They are very earnest,” McAndrew said of the organization. “They are aware of the problem and are trying to do things about it.”

The report also details sales by 280 auction houses selling Chinese art outside of China as well as 429 artworks that sold globally for more than 10 million yuan ($1.63 million). Those works accounted for less than 1 percent of all transactions while 95 percent fetched less than $77,500, according to the report.

Fine Chinese paintings and calligraphy represented the largest market segment, accounting for 66 percent by value in China. Chinese antiques and artworks are the second-largest sector, accounting for 20 percent of sales in China in 2013.

Fundamental Values

The most expensive Chinese artwork at auction in 2013 was a Yongle-period gilt-bronze figure of a seated Buddha that fetched $30.5 million at Sotheby’s in Hong Kong.

Slower growth should be a boon for the market, McAndrew said.

“You won’t get the middle class to start buying art in China unless they trust the market and the prices are in line with some fundamental values,” she said.

Signs of more selective buying were present during the New York sales this week. A 900-year-old Song Dynasty jar, estimated at $2.5 million to $3 million, failed to sell at Sotheby’s (BID) yesterday. The auction house had more success with a celadon-glazed vase that’s at least 300 years old and valued at $200,000 to $300,000. The piece, which had been acquired by American collectors of Chinese porcelain in the early 20th century and passed down in the same family, soared to $2.3 million.

Fakes, Forgeries

“Buyers have become more vigilant regarding provenance, along with a lower tolerance for what was perceived to be over-priced, low-quality works,” McAndrew wrote in the introduction. “Part of this caution undoubtedly relates to the persistence of fakes and forgeries appearing on the market.”

More wealthy Chinese consumers look at art as an investment, according to Artnet’s report. One reason is that China has “a currency that is still not fully convertible,” leading the Chinese to invest in alternative assets, according to the report. This group holds on average 17 percent of their wealth in art, antiques and jewelry compared with 9 percent in the U.S. and 7 percent in the U.K., according to the study.

“It’s a lack of alternatives to store wealth,” McAndrew said. “They are a lot more comfortable with the idea of the financial aspect of the art market.”