China art auctioneers eye slice of Hong Kong market
HONG KONG (Reuters) - A leading China auctioneer holds a debut sale in Hong Kong on Sunday, lured by the city's international buyers, low tax regime and stable regulatory framework in a trend that could bring more competition for global companies.
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.
"We want to win over more overseas market and buyers," said Wang Yannan, the president of China Guardian and the well-connected daughter of former Communist Party leader Zhao Ziyang.
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 <ARTF.PA >.
"It's great for competition," Francois Curiel, Christie's Asia president, told Reuters. "Whenever I see more auction houses coming into the market, the pie became larger."
Some, however, felt the field was getting crowded.
"It's like separating a bowl of rice into two," Tim Lin of the Lin & Lin Gallery in Beijing and Taipei said, referring to increased competition for Hong Kong's multibillion-dollar art auction market.
"How long will they last? It's everyone's guess."
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.
TAX PROBE BLOW TO CHINA ART MARKET
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.
"The tax investigation has cast a shadow on the Chinese art market," said Lin from the art gallery.
"It has a psychological effect on buyers and sellers in China ... The chain reaction is going to last for a while."
China Guardian's 2012 auction sales tally dropped 46 percent to 2.14 billion yuan this spring season, from 3.98 billion yuan in the 2011 autumn auction, but Wang attributed this largely to a stuttering Chinese economy.
"It also has something to do with the slowdown in the economy, but it has nothing to do with the tax investigation," Wang of China Guardian, told Reuters.
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.
"Hong Kong is a more liberal tax region," said Simon Young, a law professor at the University of Hong Kong.
"One would have wondered why they didn't move sooner." (Editing by James Pomfret and Sanjeev Miglani)
- Tweet this
- Share this
- Digg this
- Missouri grand jury has made decision in fatal shooting of black teen - report
- Congress signals it could back Modi's insurance reform plan
- Jindal Steel shelves $10 bln project after coal setback
- Hagel, under pressure, resigns as U.S. defense secretary |
- Recharge your phone in 30 seconds? Israeli firm says it can
American Music Awards
Boy bands bested pop's leading women in the top award categories at the American Music Awards on Sunday, but the ladies delivered the most high-octane performances including a derriere-flaunting number by Jennifer Lopez and Iggy Azalea. Full Article | Video
Katy Perry to headline NFL's 2015 Super Bowl halftime show - NFL. Full Article
Sting to join cast of his troubled Broadway musical "The Last Ship" . Full Article