Sotheby's consolidation of its twice-yearly contemporary Asian art sales in Hong Kong from 2009 highlights the continuing strength of the art market in the region.
The decision also shows that this city remains the world's third-largest art auction hot spot after New York and London.
The auction house organises contemporary Asian art sales here and in New York, and has also sold Chinese works in its London and Paris sales.
But Sotheby's Asia contemporary arts sales are drawn by the sophistication of Hong Kong's business infrastructure, says the auction house's chief executive, Kevin Ching.
'Hong Kong's fantastic judicial system gives comfort to both buyers and sellers of multimillion-dollar pieces that their contractual rights will be protected,' he says.
Hong Kong is also a cost-effective marketing hub for contemporary Asian art, Ching says.
'Many of the consignments come from private Asian collectors, and with a lot of the buyers also being based in Asia, having the sales in Hong Kong will save plenty in shipping costs,' he says.
And by bringing art 'of the highest quality and having them all focused in dedicated sales in Hong Kong, we hope to see a quantum leap in buyers from the mainland', Ching says. 'They are the biggest potential market with incredible room for growth.'
Since Sotheby's set up shop in Hong Kong three decades ago, demand has always been strong for more traditional Chinese works such as ceramics, jewellery, watches and traditional paintings. But in recent years, the firm has witnessed a significant increase in mainland buyers, who now account for 20 to 25 per cent of sales in ceramics and Chinese works of art. Ching says as the mainland economy booms its newly rich people are buying art for pleasure, investment or to reinforce their social status.
It is natural for them to look for and buy culturally familiar items, experts say. But now, with the prices of Chinese contemporary making headlines, buyers throughout this region also want a piece of the action, they say.
'Purchasers of Chinese contemporary art used to be mostly westerners,' says Ching. 'Gradually we saw an increase in participation of Asian and Chinese buyers, not necessarily just from the mainland, but also from Hong Kong, Taiwan and Indonesia.'
Sotheby's sales of contemporary Asian art have shown that works command the best prices at auctions in Hong Kong. At its autumn 2007 sale, works by Cai Guoqiang and Yue Minjun, among others, were purchased overwhelmingly by Asian buyers at prices far exceeding experts' expectations. At Sotheby's spring 2008 sale in April, Bloodline: The Big Family No 3 by Zhang Xiaogang went to a Taiwanese collector for HK$47.3 million, a record for the artist at auction.