Hong Kong is where the market for traditional Chinese art such as porcelains was born. It¡¦s still the epicenter ¡V and buying or selling here is not for the faint of heart.
NOTHING SHOOTS THAT shivery spike of thrill and alertness down your spine like the commingling of art, ego and money. And the best place to feel it: one of the city’s major auction houses as yet another lot goes under the gavel. Their hushed, well-appointed rooms bespeak wealth and taste. Their patrons ooze the serenity of well-heeled confidence. Bids compete with the quiet, deadly purpose of rapiers.
You’d never guess you are actually in the Wild West.
But you are. The market for traditional Chinese art has become a worldwide bonanza, pulling in prices three, five, 10 times higher than a decade earlier. And Hong Kong, a distant outpost a few decades ago, has become its epicenter. The local branch of Sotheby’s, for example, posted 2008 sales of HK$6.16 billion, a tenfold increase over 1998. Christie’s Hong Kong has broken world and Asian records for single objects over the last few years. The Asian mark-setter, a rare (but otherwise sedate) Qing four-character Imperial bowl decorated by swallows, exceeded presales estimates by four times when it sold for $151.3 million.
For rocket-like trajectory into the ozone of prices, consider just one item. An early Ming vase sporting an exuberant yet refined pattern of raspberry and pink peonies was plucked from an obscure Scottish manor onto the London auction market in 1984, where it brought $2.82 million. Every few years it went on the block in Hong Kong, each time escalating in value until Steve Wynn, CEO of Wynn Resorts and the Wynn Macau paid more than $78.5 million for it in 2006. Thirty times the price in 22 years. Not a shabby investment.
Prices like these have coaxed what one dealer called a “deluge” of classical objects out of the dens and galleries of private collectors over the last few years. “Many families brought a great many objects of beauty and antiquity with them after 1949,” the dealer explains. “But they have always thought of them more as family heirlooms than as a collection in a Western sense, to buy and to sell like stock.”
Fair to say that some of these families are now turning a new, cold eye on their beloved porcelains.
All of this activity has turned a gentlemanly, predictable market upside down. Collectors are now world citizens, as likely to shop and buy in London and New York as with the Hollywood Road dealers who have served their families for decades. Dealers now find themselves dragged into service as independent appraisers – a new role for which many are not prepared. The old-guard – private, somewhat reclusive collectors’ associations such as the Min Chiu Society – have begun to reach out, to educate the city’s newer collectors on the finer nuances of, say, firing techniques used by the emperor’s kilns in one province or another, or how the Song potters used glazes to create an intriguing, and oddly prescient form of monochromatic painting. And entrepreneurs from the heartland of mainland China, seeking social stature to burnish their new fortunes, have begun to brandish their paddles high, hard and fast, even overbidding to make a point. Good for face, they say.
Against this backdrop the auction houses continue to grab ever-greater shares of the market, leveraging their massive resources for research and verification, and employing some cunning new techniques for squeezing the highest profit out of each sale. And the inevitable questions about the authenticity of some objects began to crop up with disturbing frequency.
It’s not hard to pin down the exact moment the art world began to take serious notice of Hong Kong’s hidden treasures: November 25, 1980, with the sale of the celebrated Edward T Chow Collection. Another sophisticated import from Shanghai, Chow was a legendary, protean figure: the sharp-eyed, self-taught godfather of Hong Kong collectors. By the end of his life he had amassed a celebrated collection of Ming porcelain from the Chenghua period.
“At that time a collection was seen as a highly personal form of expression,” recalls Nicolas Chow, his grandson and now worldwide head of Chinese ceramics for Sotheby’s Hong Kong, who has masterminded a number of recent sales of Imperial artifacts. “So nobody knew how the public might receive such a collection.”
With open pocketbooks, it seems. Raking in $5.2 million, it set a world record for Chinese art – and convinced the major auction houses to start paying serious attention.
It was the right moment for the auctioneers to strike. “Until that time many of the sales had been private,” recalls Andrew Kahane, a respected independent appraiser of Chinese art based in New York and one of the founding staffers of Christie’s Hong Kong. The sale sent a shock wave through the collecting community of Hong Kong – undergoing a generational shift as many of the original owners began to pass decision-making on to younger members who had no recollection of 1949. The new generation was just as committed to collecting – but far more willing to be public about it, and to build their collections by wheeling and dealing in a newly transparent marketplace.
And not a moment too soon. The wheeling and dealing was about to get a lot more complicated.
The Chinese government has always held an ambivalent view of Imperial art works, even the antiquities. Committed to egalitarian revolution, the victorious cadres viewed these collections as embodiments of a social order they were trying to eradicate. But they also understood the objects were deeply rooted in Chinese history and culture and wanted to appropriate their legitimacy. More portable pieces came to Hong Kong easily after 1949 with the great wave of immigrants from the mainland, with little or no interference. But far more was left behind. “The authorities knew these objects were valuable, but did not know what to do with them,” Chow said. “So they insisted that they be registered, but often just left them in place or archived them in the local Wenwu Shangdian – the People’s Cultural Relic Warehouse.” There they remained safe – even, somewhat surprisingly – throughout the Cultural Revolution.
No wonder a good number of objects began to inconspicuously ooze into the city’s commercial art market over the last decade as Hong Kong fell into a loosely wound sync with the Chinese economy. And that brought up what is perhaps the most vexing issue facing any collector: provenance.
Provenance is the Holy Grail of collecting – and thus of appraising, buying, selling, studying, even bragging about what you own. It’s the trail of documentation and verified circumstances proving what you have is, indeed, what you have. Good provenance sells. “The price disparity is huge,” Chow says, and everyone else agrees. No problem for a single famous painting that’s been fawned over for centuries by everyone from the Borgias to the Metropolitan Museum, each one leaving a record. But Chinese Imperial works are different. They were meant to be anonymous and are known by the series or the place of origin. Even the most prized objects are signed not by the artist, but by the scholar/bureaucrat who decided what measured up to Imperial standards, threw much of it away, and signed a few pieces with the Emperor’s name, but in his own distinctive style. Even now, the most dependable way to vet a classical porcelain is to compare the mark with others by the same long-dead inspector.
Complicating the determination of provenance, Chinese classical art has always honored the tradition of emulation. “It was not at all unusual for an artist to devote much of his career to copying the works of a master,” according to the American scholar of Chinese classical art Wei Yang. In today’s hot marketplace, it’s all too easy for unscrupulous or unknowing dealers to misrepresent the origin of works, or to be taken in by the small number of high-quality fakes that emerge from the much larger market of fakes for tourists.
Provenance was not much of an issue for collectors in the past. “It was a gentleman’s marketplace with an old-fashioned relationship between the collector and the dealer resting on distinctions in social class,” said New York’s JJ Lally, one of the world’s most prominent dealers in Chinese art. “The collector was the man in charge. For a dealer to offer an opinion on his taste or purchases would have been presumptuous in the extreme. A good deal of caveat emptor applied, and everybody knew it.” Transactions were on approval, with no cash changing hands until the Lunar New Year when the items were either paid for or returned to the dealer.
But finding good provenance takes a full battery of people and skills, far beyond the abilities of dealers. The major worldwide auction houses, Christie’s and Sotheby’s, were in a position to provide it with legions of scholars, cutting-edge research, worldwide contacts, and scientific facilities for dating, spectrographic analysis and chemical testing.
And they had people, lots of them: “No piece goes on auction here without many, many sets of eyes looking at it,” says Pola Antebi, head of Chinese ceramics for Christie’s Hong Kong. That’s especially important for Chinese ceramics, where subtle variations of balance, proportion, texture, method of production and so on can bespeak the difference between the real thing and an artfully produced fake. “Signs of wear, of a life in the world,” she adds. “That’s important too.”
The new houses had an up-to-date business model too, with elaborate seller’s agreements and even charged a buyer’s premium (more about that later). The local auction houses, by contrast, were simply dealers by another name who auctioned what they owned.
The triumph of the auction houses in Hong Kong wasn’t a forgone success. Christie’s tried to enter Japan in 1981, but was sharply rebuffed by the dealers. Intensely concerned, they were determined to thwart this threat. One veteran of the auction scene puts it this way: “They put out the word that everything there was a fake, and they stuck to their story.” Collectors stayed away, and to this day neither Sotheby’s nor Christie’s has a salesroom in Japan.
Now that they are both in Hong Kong, the two great houses are locked in a competition that is both genteel and ferocious. There’s no point to competing for customers in a transparent marketplace, so they compete for pieces to sell. As a buyer, you pay for this competition through the published but little-understood buyer’s premium.
The traditional auction house model is simple: the seller pays a percentage of the purchase price to the house. In exchange he gets all of the resources supporting the sale – expertise, marketing and the all-important assumption of liability. He doesn’t mind, because all of it makes the final hammer price much higher. But this percentage is increasingly subject to negotiation as sellers, many of whom know one another, compare notes and drive harder bargains. In today’s hot market the commission is usually going down – way down. Sometimes, the insiders say, this figure is actually going negative. That’s right: the house pays the seller for bringing the piece to him instead of the other guy.
That’s where the buyer’s premium comes in. Stuck at 20 percent for several years, it has recently ratcheted up to 25 percent of the hammer price to make up for the shrinking commissions. The art purchaser is, in effect, subsidizing the competition among the auction houses – something the high-rollers budget for and the others probably don’t understand.
But the market is expected to remain brisk. In its final days, the Bush administration finally acceded to a Chinese government request to ban the import of many antiquities to the United States. On its face, this measure is not too onerous: it only extends to the end of the Tang dynasty, in AD 907. (Nor will it reduce looting as long as there is a strong illicit market for antiquities within China itself.) But some experts such as Lally expect the measure to have a chilling effect. Inspectors and border guards, he says, cannot be expected to tell the difference between various periods of Chinese art, which, he says, sometimes confuse professionals.
And the Chinese government is also becoming far more assertive in demanding the return of items looted during colonial incursions. It recently fought tooth and nail to prevent Christie’s from selling two bronze animal heads stolen from the Old Summer Palace fountain in Beijing by French and British soldiers in 1860. It lost that battle in a Paris courtroom in February, but is certainly planning for the next one. Collectors, as we speak, are certainly planning to beat them to the next lot.
Tips for the Would-be Collector
The current global economic downturn is a perfect time to enter this marketplace the right way – slowly and carefully building up the kind of knowledge that becomes, with a good deal of hard work, connoisseurship.
Listen to your elders. True, it’s unlikely you can just join the Min Chiu Society or the Kau Chi Society. These private clubs came together after 1949 as like-minded collectors sought strength in numbers to network, buy and exchange tips – and also, one suspects, to prevent ruinous bidding wars. Over the last several years they have become a good deal more open, sponsoring various public exhibitions of their members’ holdings and dispatching expert speakers to lecture at museums.
Prowl the storefront dealers. “The stuff in the window is usually just for show, to capture the odd tourist,” says JJ Lally, one of the world’s most prominent dealers in Chinese art. The Hong Kong tradition, he adds, rewards personal relationships with dealers instead of a Western-style transparency. “Once you buy something and make your interest plain, you see all sorts of interesting items come out of the backroom.” The upside: an opportunity to develop a personal relationship with the dealer. The downside: the likelihood that others have done the same thing, long before you.
Take in the auctions. This is easy. The major houses welcome people to their auctions, without requiring the registration needed to become a bidder (credit checks, authentication of ability to pay, etc.). This makes them perfect for seeing a good number of items and for gauging how the bidders react to them. Better yet, the larger auctions are usually preceded by a public exhibit of all items in the lot, an event staffed by experts where you can see and, if you play it right, actually touch and hold objects that an emperor – or at least an imperial flunky – would have held.
Hire an independent expert. The investment-class bidder who has not devoted his life to the study of these objects needs an unbiased mentor, an advocate who will research the objects, teach and advise him and sometimes even bid for him. Ideally, this should not be a person actually involved in sales himself. Some dealers can put aside their self-interest to do this. More often, you can find a trustworthy academic at one of the lectures or exhibits – in Hong Kong, unlike New York, independent appraisers do not hang out their shingle in public.
Keep this tip quiet: Song ceramics. With an almost modern simplicity and austerity and deceptively complex glazing schemes, the works of the Song period have long been overshadowed by Ming and Qing ware. But several experts say this area has some of the only remaining bargains in the marketplace, with prices sometimes under half that of their flashier cousins.
Follow your heart, then your judgment. The goal, according to is to develop a second sense, an intuition about the works that are real and true. “When you handle many of these works you develop a second sense about them,” says Pola Antebi of Christie’s in Hong Kong. “And then you apply everything you know about where and how they were made.”
