This week, Asian Art in London celebrates its 20th anniversary, showcasing London as a centre of expertise for the finest Asian art, from ancient to contemporary. It is a particularly ripe moment in the art world for the Chinese art and antique market. In the past year, China rose to a position of prominence, with auction sales accounting for 34 per cent of the world total by value, exceeding the US, which recorded 32 per cent, and Britain, which has 18 per cent (Art Basel and UBS Global Art Market Report). The majority of these sales take place at open auctions (circa 68 per cent by value), with auctions of Chinese antiques selling increasingly valuable Chinese paintings, jade, furniture and porcelains to Chinese audiences who appreciate the heritage and history of these objects. Since 2002, the Law of the People’s Republic of China on the Protection of Cultural Relics allows the lawful circulation of cultural relics bought in auction, helping overseas artwork to return to China and to become the most coveted items in the domestic auction market.
Whilst global auction sales of Chinese art and antiques slipped five per cent in 2016, totalling $6.7 billion, the top end of the market with lots above ¥10 million reaching a 29 per cent market share in 2016 -- more than double the total two years ago (Antiques Trade Gazette). Record prices at auction lead most art professionals to strongly believe that the Chinese market is here to stay and overall very lucrative.
While six of the ten top auction houses are Chinese, the Chinese art auction market is not yet as mature as that of the US and Europe, with industry leaders no more than 25 years old. There is a need for Chinese auction houses to become more globalised to enhance their positioning within these dominant markets. A crucial step in this is Chinese auction houses broadening their domestic brand influence and business presence to the international art world.
Duton’s (established 1999) is part of the first wave of Chinese auction houses and is a prime example of a forward thinking art business. Duton’s Chairman, Mr Du, a leading voice for Chinese art and antiquities, was vastly ahead of his contemporaries with his vision and long-term commitment to expanding his auction house into the UK. The company launched Asian Art in London this Sunday, 5th November (on view at Grosvenor House Hotel through 8th November), with a private view for their dedicated collector base who trusts Duton’s masterful sourcing of works and their business integrity. Duton’s Chinese collectors based overseas are able to appreciate the scarcity of certain rare art forms, such as Ming and Qing Dynasty porcelains, and will pay sky-high prices to secure them.
Demand outweighs supply
Whilst historical Chinese objects have long held a prominent position in the UK’s top artistic institutions, Duton’s provides savvy collectors with the rare opportunity to build their own comparably significant archives. Duton’s works have been placed within notable collections of European families such as the Delvallees and the Crombez, thus preserving their rich history and provenance. Demand for such works far outstrips supply, yet the process of meeting demand is neither simple nor straightforward, from a legislative perspective. Below is summary of the challenges that are particularly pertinent to Chinese auction houses at this pivotal moment within their global art world ascent:
1. Concerns over counterfeit antiques
Chinese auctions reported an unsold rate of 55 per cent, much higher than other countries such as the US market which has an unsold rate of 26 per cent, suggesting a continuing problem with fakes in the market and doubts about the integrity of some sales. Chinese auction houses in Britain and Europe can quell the concerns of their buyers by maintaining European industry standards. Duton’s works, for example, are all formally approved by Oxford Authentication, the premier authenticating body for antiques. Most domestic auction houses in China, however, don’t have guarantees of authenticity. Furthermore, the cost of authentication is fostering a disappearance of certain art and antique categories entirely. Jade, for example, often costs more to authenticate than it commands at auction, a burden most auction houses choose not to bear.
2. Ability to source high-quality works, with an inability to satiate demand.
Many Chinese antiques are sourced from auctions in Hong Kong. Some art businesses buy Chinese works direct from Hong Kong, whereas others buy works from the US who purchased from Hong Kong at an earlier date, causing inflated prices. A lack of transparency and instability around the value of Chinese antiques breeds an atmosphere of distrust amongst buyers who are new entrants and not experts in the market. Increased transparency is made more and more possible every day thanks to professional news providers such as Artron.net, Hurun, YangGallery.com and others. So too, increased competition, such as Poly International Auction of China’s Poly Group, a $40 billion state-owned conglomerate, enhances transparency.
3. Recurring issue of late or nonpayment by winning bidders.
According to the Global Chinese Art Auction Market Report from Artnet and the China Association of Auctioneers (CAA), non-payment is a severe problem in China. In 2016, the overall payment rate dropped to 51 per cent in 2016, and for high-value lots (¥10 million and above), less than half were paid for (47 per cent) in 2016. The newness of auction houses in China has prompted displays of poor practice, such as swindles in salesrooms where companies would hire shills to pretend to bid but actually push up prices and mislead other bidders. Similar issues have been seen in more established markets, and improve with time as domestic businesses develop better checks and balances.
The above factors present both legal and art professionals with complex challenges to consider, and in turn the opportunity to create unique solutions to the elusive yet constantly evolving field of art authentication.
Lauren Xandra is managing director of LX Consultancy