Auction houses pin hopes on spring sales
Executive of Chinese art seller sees stability in the market and expects collectors to resume buying after a plunge in the value of works sold
Shrugging off international competition, the mainland's art auction houses are busy preparing for their spring auction season, hopeful that collectors will start buying again after the market fell heavily.
"Prices for art are back to normal, and so we expect more collectors to participate in our auctions this year," said Zhao Xu, executive director of Beijing Poly International Auction, the largest auction house on the mainland and the world's third largest.
He said the auction market peaked in 2010, boosted by the mainland's fast-growing economy and ample liquidity in the hands of entrepreneurs.
"The prices of some artworks increased 10 times between 2008 and 2010," Zhao added, noting that soaring prices were not good for the healthy development of the industry.
According to the China Association of Auctioneers, art auction sales plunged to 27.93 billion yuan (HK$35.01 billion) last year, a drop of 51.5 per cent from 2011, which itself was a 56.1 per increase from 2010.
"The correction in the market since the second half of 2011 has helped prices return to a reasonable level," Zhao said, adding that observers blamed the mainland's economic slowdown for the drop in sales.
Dong Jun, general manager of Beijing Forever International Auction, said: "Art auctions were a bit out of control before 2011, when industry consolidation began."
He said the spring auctions might not see significant rises in prices but that the market had stabilised. Prices were now based on artistic value, rather than being pushed higher by speculation, Dong said.
Market consolidation had helped eliminate fake deals and works, he said. "It's time for collectors to play the game again and bid for what they really like."
The world's two largest auction houses, Christie's and Sotheby's, have their own ambitions on the mainland.
Beijing Forever is the Chinese licensee of the Christie's brand, but the collaboration will end in September.
In April, Christie's said it had received a licence to operate independently in China.
"The board of directors has yet to decide how Beijing Forever will develop once the collaboration ends," Dong said.
Sotheby's, the other major international auction house, set up a joint venture with state-owned Beijing Gehua Cultural Development Group last year.
Zhao said the increased presence of global auction houses would not result in harmful competition. "We have a longer history in China [than them] and have established relationships based on trust with our customers, sellers and vendors," he said.
Traditional Chinese paintings, ceramic and antiquities, and contemporary art are the pillars of the mainland's art auctions.
"In China, our advantage is that we have more experts in different categories," Zhao said.
He added that Poly International had experience auctioning both paintings and contemporary art.
Poly International focused on promotion of contemporary Chinese artists, he said, citing Zhang Xiaogang, a symbolist and surrealist painter, and Qi Zhilong, known for his political pop images.
Zhao said Poly International had held some special sessions for the auctioning of works by older contemporary artists like Wu Guanzhong, recognised as one of the founders of modern Chinese painting.
Christie's and Sotheby's would not be able to host large auctions for the sale of a wide variety of artworks, Zhao said, adding that their auctions would be for particular items, such as jewellery and antiquities.
The mainland's rules on heritage conservation and taxes on the importation of such items would hinder the development of international auction houses, he said.
The spring auctions in Beijing this year began when China Guardian, the mainland's second-largest auction house, hosted an auction on May 10.
Qi Baishi's black-and-white painting Eagle Perching on the Pine received an opening bid of 1.8 million yuan. The bidding reached five million yuan within a minute before it ended with a sale price of nine million yuan. Transaction value at the auction amounted to 2.57 billion yuan, up from 2.06 billion yuan last year.
Poly International will hold its spring auctions from June 1 until June 6. Zhao said he expected their sales to exceed two billion yuan, similar to last year's autumn auctions, when works worth 2.3 billion yuan were sold.