Market China

Beijing to get freeport to challenge Hong Kong’s supremacy

The Art Newspaper exclusive: facility next to international airport due to be built by end of 2013

Beijing Capital International Airport will be next to planned freeport

The Chinese government plans to turn Beijing into a key art hub in Asia by building an 83,000 sq. m freeport next to the Beijing Capital International Airport scheduled for completion late 2013. Officials hope that the vast storage facility, which is expected to be tax exempt, will encourage collectors and corporations to stockpile their art in Beijing. A collector based in the city, who wishes to remain anonymous, says the planned freeport will “have a huge impact on the Chinese art world”, stressing that the Beijing base will challenge Hong Kong’s supremacy as an art centre.

Euroasia, the Swiss holding company behind the Singapore freeport which opened in 2010, is collaborating with the state-owned business organisation Beijing Gehua Cultural Development Group on the project. The facility will be called the Beijing Freeport of Culture. “Gehua’s plan is to promote Chinese art both nationally and internationally; [it] wants to create and organise a market that is loosely regulated,” says Tony Reynard, the chairman of the Singapore Freeport Pte company. “There is a huge domestic market in China but the freeport in Beijing will also be important for the international market as import tax will be greatly reduced or even scrapped at the facility.”

Earlier this year, the Chinese government reduced the customs duty on imported works of art from 12 % to 6% but the tax break only applies for a year. Apart from the customs duty, importers are still required to pay value added tax of 17% plus an additional consumption tax of 5% (The Art Newspaper, China Focus, May, p6).

Li Danyang, the general manager of Gehua, told the China Daily newspaper that the tax incentives should appeal to art trade enterprises. The Beijing centre will become the world’s largest art trading venue in terms of “total space, market coverage and functions”, adding that a major Swiss company responsible for storing art has already expressed an interest in using the new freeport (The Art Newspaper, Art Basel daily edition, 12 June).

Meanwhile, Euroasia plans to launch a freeport in Luxembourg by late 2014 measuring 20,000 sq. m. Promotional literature for the project says: “The Luxembourg freeport will have at its premises professionals who can provide value adding services such as… authentification, restoration, photography and insurance.” Luxembourg is the largest wealth management centre in Europe, the company stresses.

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Comments

30 Jul 12
16:39 CET

K P V NAIR, KOLKATA (CALCUTTA)

I have started reading the Art Newspaper only recently. Based on the experience, I find it an extremely purposeful publication which deseves support from all concerned. Wish it continuous success. I run an NGO named Asia Centre focussing on the culture, art and geopolitics of ASIA.

30 Jul 12
16:39 CET

EBRIEL, BEIJING

Buy art in Hong Kong, store it in Beijing (not far from 798 & Caochangdi). It's a formula that could work for many collectors here, and perhaps be of benefit to local museums. Yes trust will take time to build. Maybe by the time the yuan is fully convertible.

30 Jul 12
18:8 CET

JAN KRASNAN, PRAGUE

Good point, Craig. But maybe Americans will lead the way because Chinese authorities won't necessarily share information with their U.S. counterparts as the Swiss have been forced to here and there... Unexpected nationalization is probably lesser evil than a few years in prison for tax evasion :=)

26 Jul 12
16:10 CET

CRAIG MATTOLI, GUANGZHOU

It takes trust and a sense of certainty to build any kind of financial haven, even this sort. Will anybody, especially foreigners, but even locals, have the level of comfort that it would require to make such a venture work? I guess we will have to wait and see.

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