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Local collectors pick and choose in Chinese art and ceramics sales, with unsold lots increasing in key auctions

The days when buyers would pay top prices for any work seem to be over, as a maturing market becomes more selective and sensitive to change in the global economy

Hong Kong

Collectors of Chinese art and ceramics are becoming increasingly selective. The autumn season sales in Hong Kong, which began with Sotheby’s in October and concluded with Bonhams and Christie’s in November and December, saw record-prices for rarities, but less speculative buying than has previously been the case. This was demonstrated by the sell-through rates at Bonhams’ Fine Chinese Ceramics and Works of Art sale on 28 November and Christie’s Important Chinese Ceramics and Works of Art sale on 30 November, which were 58% and 57% sold by lot respectively.

These sales were in sharp contrast to auctions in recent years where prices were high and nearly everything of decent quality and imperial lineage was snapped up. Today’s market comprises newly-cautious buyers, especially those from China, who are demonstrating a fresh sensitivity to the unsteady global economy.

“The Chinese auction business is a fascinating model… it is global but uniquely dominated by those of Chinese origin. Talk about putting all your eggs in one basket,” says Colin Sheaf, chairman of Bonhams Asia, who helped set up Christie’s in Hong Kong in 1986. He says that 90% of the lots, and 99% of the value, of Bonhams Hong Kong sales tend to be bought by Chinese from the mainland, Taiwan, Hong Kong and Southeast Asia.

Chinese ceramics, especially objects created by the royal workshops of the Qing dynasty, has been a critical category. Though imperial porcelain remains a rare genre chased fervently by serious collectors from both Asia and the West, it has become clear that Chinese buyers cannot be expected to just buy anything at any price any more. “The market is still very strong at the top, but notably weaker at the lower areas, reflecting the weakening credit availability for less well-heeled collectors in China,” says Sheaf.

An early sign of this was evident last spring at the first Zuellig sale at Sotheby’s in Hong Kong on April 7, when the star lot, a Qing vase, did not sell at auction (est HK$180m-HK$300m, US$23.1m-US$38.5m).

A Western buyer purchased it afterwards in a private deal for US$25m, according to Sotheby’s. At the time, the trade said that potential buyers had been discouraged by the newly-introduced policy of asking interested bidders to pay a hefty cash deposit, a policy introduced because of the increasing problems of non-payment and late payments in China.

Sotheby’s staged a coup with the consignment of works from the estate of Switzerland’s Zuellig brothers, long-time Chinese antiques aficionados who made their fortune in pharmaceuticals and began seriously buying ceramics in the 1950s. Their purchases became known as the Meiyintang collection, considered one of the world’s most impressive assemblages of Chinese porcelain. The spring sale was followed by an auction on 5 October where the continuing hunger for rare works was in evidence. A vase with blue and white fruits and flowers from the collection sold for HK$168.7m (US$21.6m, est HK$80m-HK$120m), setting a new auction record for a Ming ceramic. At Bonhams on 28 November a buyer set a new record of HK$25.3m (US$3.3m, est HK$4.9m-HK$9m), for a Qing dynasty snuff bottle, nearly triple the previous HK$9.3m record set less than two years before in May 2010.

Nonetheless, the overall list of unsold lots at Christie’s, Sotheby’s and Bonhams was long—Sotheby’s only had a 22% sell-through rate for ceramics and works of art by lot. In China, where there are hundreds of auction houses specialising in antiques, some sales have had buy-in rates of 80% in the autumn auctions. But, for the major international houses operating in Hong Kong, it was still a record year. At Bonhams the autumn auctions brought in a total HK$240m (US$30.8m) across the sectors, a 15% improvement on the spring sales. Christie’s total 2011 revenues of HK$7bn (U$904m) represented a 25% rise from the year before, while Sotheby’s recorded an annual sales figure up 40% from 2010, of HK$7.8bn (U$1bn).

China Guardian, one of the giants on the mainland scene, maintains an office in Hong Kong (as well as Tokyo, Taiwan, New York and Vancouver). The house sold Rmb3.9bn ($605.9m) in art, antiques and jewellery in the first five days of the autumn session alone (12-16 November) with auctions in Beijing (foreign houses cannot operate in China, except in partnership, such as Christie’s and Forever Auction). While happy to promote his company’s results, Wang Yanan, the president of China Guardian, says the market is evolving: “The performance of the market is getting more rational; collectors are becoming more mature.”

Originally appeared in The Art Newspaper as 'Local collectors pick and choose'