|Landscape series by Qi Bashi, Album of Mountains and Rivers|
1922, which led China Guardian's auction
China Guardian's sale of Chinese art and classical furniture in the former British colony follows its rise as the world's third largest auction house on the crest of China's art market boom, with sales of $1.77 billion last year...
The sale, though relatively small, is seen as a symbolic foray by China's top auction company into the turf of goliaths Christie's and Sotheby's who have long dominated international auction hubs like Hong Kong, New York and London.
China Guardian's key rival, Poly International is also planning an inaugural Hong Kong sale in late November, while A&F Auction and Beijing Rongbao Auction aim to enter Hong Kong in one or two years, according to art market reports.
China's wave of millionaire buyers and investors have helped propel Hong Kong into the world's fourth largest art auction hub, with nearly 7 percent of global art auction revenue in 2011, according to French art database Artprice.com...It certainly seems that the Hong Kong market can only continue to grow, especially in light of its favourable tax regime as compared to China, as well as, obviously, its proximity.
Art dealers and experts say the Chinese expansion into Hong Kong is also being driven by a tightening regulatory environment in China, that has grappled with widespread art crimes including tax evasion, a proliferation of fakes, money laundering and manipulative bidding practices...
In April, a large-scale Chinese customs probe into tax evasion on art imports delivered a blow to the art market, with at least six prominent art dealers, collectors and artists being investigated, according to art dealers and Chinese media reports. "The tax probe had a huge impact on the spring auctions in China," said the owner of an art gallery in Taipei who is a frequent buyer in the Chinese art market, but who declined to be identified because of the sensitivity of the matter. "Everyone finds himself in danger so the market is extremely cold." According to market researcher ArtTactic, total auction sales this spring from the biggest four auction houses in the China market dropped to $1.5 billion, 32 percent lower than the autumn season in 2011 and 43 percent less than a year before...
Art market experts, however, say Hong Kong's laissez-faire economy, solid regulatory framework and zero-tariffs on art imports, make it a secure and stable alternative for China's auction firms. Although Beijing has lowered its import duties on arts to 6 percent from 12 percent since the beginning of 2012, another 17 percent of value-added tax still poses a huge burden to Chinese auction houses.
Source: Reuters, 7 October 2012