Shanghai is threatening to steal a march on Hong Kong's art market by allowing a leading global auction house to conduct its business there.
Christie's yesterday said it planned to hold an auction this autumn in Shanghai, after Beijing granted it a licence to open a wholly owned subsidiary in the city.
The London-based auction house is the first foreign firm to win such a licence in the world's fastest-growing art market, powered by the growing army of affluent mainlanders.
In an exclusive interview with the South China Morning Post, Christie's chief executive Steven Murphy said the move would significantly boost the mainland art business.
"Chinese collectors, especially those new to the art market, will have the opportunity to participate in our auctions without having to travel overseas," Murphy said.
Until now Christie's has held China- and Asia-themed auctions in Hong Kong, and art patrons from the mainland have had to travel to take part.
"Our launch in China will be a game changer and it's all about right timing, right conditions, with the right people," he said.
Christie's rival, New York-based Sotheby's, has a toehold on the mainland in the form of a joint venture with state-owned Beijing Gehua Cultural Development Group, and can only hold auctions through the joint venture. In a rare move, Christie's will have no such requirement.
Industry watchers say the approval for Christie's shows the new Chinese leadership is serious about its pledge to offer foreign firms a level playing field.
"The Chinese government has shown its vision to invest in and develop art and culture. It is a very encouraging sign that the government is taking measures to liberalise certain markets and welcome international entrants," Murphy said.
The launch of Christie's Shanghai unit will intensify the competition between Christie's and local rivals such as China Guardian and Poly International, the two Beijing-based, government-backed auction firms.
Both Guardian and Poly have been trying to expand their business outside the mainland in recent years, hosting auctions more often in Hong Kong to attract international bidders. Shanghai aims to be a world-class global financial centre by 2020, posing a threat to Hong Kong's status as the gateway to China.
The art business has grown rapidly in recent years in Asia, particularly in China, where deep-pocketed mainlanders have been looking for assets that offer better returns than the meagre interest rates banks offer.
Investors have already been spending big on rare wines, watches and jewellery on the mainland, but have to come to Hong Kong when it comes to art buying.
Last month, Christie's helped former chief secretary Henry Tang Ying-yen to auction part of his rare wine collection for more than HK$48 million.