China art auctions: feeling the chill

There is a chill in the air as Sotheby’s opens its Hong Kong autumn sales on Friday, and it’s not because the worst of the summer heat is over. This week is China’s “Golden Week”, traditionally the public holiday when the world’s most populous country goes on holiday and spends a lot of money abroad. But retailers in Hong Kong – the most popular destination for mainland tourists – have noticed a sharp fall off in sales growth this year.


This could be the worst Golden Week since 2003, when Hong Kong started allowing in independent mainland Chinese tourists, said Caroline Mak of the Hong Kong Retail Management Association.

Retail sales could have fallen compared with last year’s holiday, she said. At best, the industry was expecting mid-to-high single digit growth.

Nor is the gloom just in Hong Kong. In nearby Macau, casinos reported a 9 per cent fall in September revenue compared with August, or a year-on-year 12.3 per cent increase (which may sound healthy but is a far cry from last year’s 42 per cent growth). The latest figures further confirmed that mainland Chinese gamblers – responsible for the bulk of the city’s annual casino revenue – are not as free with their money as before.

None of this bodes well for this week’s auctions or Christie’s sales in November. Wealthy mainland Chinese who used to frequent Hong Kong’s luxury retailers are also the ones who have helped turn the city into a major art hub.

Sotheby’s total estimate for the October 5-9 series of auctions is HK$1.6bn ($200m), compared with HK$2.4bn for last year’s Autumn sales, even though the number of lots for sale has gone up 6 per cent this year to 3,600.

Competition among auction houses is also stepping up, with China Guardian Auctions holding its first sales outside the mainland in Hong Kong on Sunday. It is focusing on traditional Chinese ink paintings and calligraphy, as well as classical Chinese furniture, and the total estimate is around $26m. It is a small sum compared with Sotheby’s sales but as China’s second-largest auction house (and fourth in the world), Guardian is a force to be reckoned with.

China’s growth slowdown has also been blamed for the lacklustre performance of Sotheby’s and close rival Christie’s auctions in New York and in London recently, but the two houses remain bullish about the long-term demand for art in China.

Sotheby’s has just set up a joint venture with state-owned Beijing GeHua Art Company, becoming the first western auction house allowed to sell art in mainland China. Christie’s, no doubt, hopes to expand its relationship with Forever, its mainland licensee.

Speculators may have left the market but serious collectors see this as a good time to snap up quality items, says Jiang Luyang, Christie’s Asian spokesperson.