Now Sotheby’s has a joint venture with a state-run company, and Christie’s won a license this year to become the first international auction house to operate independently in China — developments that may serve to foster competition and higher standards in the market.
Zhang said bringing in the Western auction houses was like putting a crocodile in a pond.
“It makes the fish swim faster,” she said.
Less than a decade ago, the Chinese art market was still quite sleepy, a legacy of the Cultural Revolution, when luxury items were viewed as bourgeois and the Red Guards raided homes, seizing and destroying art. Ma Weidu (馬未都), a major collector based in Beijing, recounted how easy it still was in the 1980s to secure small artifacts. People gave them to him for nothing, he said, or traded them for a few cigarettes. Occasionally, he would pay a small fee.
“They’d say: ‘Take it all. All I want is a washing machine,’” he said.
The auctioning of art remained rare until the early 1990s, when the government lifted restrictions on the sale of cultural relics. Still, the art market did not begin to take off until 2004, fueled by rising incomes.
Now there are more than 350 Chinese auction houses that deal in fine arts. The two largest — Poly International Auction and China Guardian — are billion-dollar enterprises with offices in several cities, including Tokyo and New York, and close ties to the nation’s ruling elite.
However, as the market has grown, so has its dark underbelly. Price manipulation is rampant, analysts say, as collectors and investors, perhaps an art investment fund with large holdings in a particular artist, bid up a work to boost the value of their entire inventory.
Sometimes, experts say, auction houses themselves throw in fake bids.
The Chinese have a name for the price-boosting process. They call it “stir frying.”
While some collectors care deeply about their art, even exhibiting it in their own elaborate private museums, many buyers are primarily investors looking to flip a work for profit, experts say. Objects are sold and resold. One painting by Qi, Fish and Shrimp, sold four times at auction in the 10 years ending in December last year, the price climbing to US$794,000 from US$30,000 in 2002, before trailing off last year to US$552,000.
Resale opportunities are a priority for many buyers. At an auction in Beijing last month, four men from Guangzhou bought several paintings worth tens of thousands of dollars.
“Most people you see here, we don’t have a real job, we are traders,” said one of the men, in a white bomber jacket. “We buy them and resell them to educated, wealthy people.”
Analysts say that flipping artwork contributes to the market’s nonpayment problem. Before an auction, a buyer might find a collector interested in a piece and bid successfully for it, but refuse to pay if the deal with the collector falls through.
And then there are the payment problems that arise because China’s art market is, economically speaking, so young, and its rich are so recently minted.
“There is still a big difference between East and West in understanding whether raising a paddle at an auction is actually a binding contract or not,” said Philip Tinari, director of the Ullens Center for Contemporary Art in Beijing. “Some young starlet buys a bunch of paintings at an auction, walks out and says: ‘Nos. 13, 11, 7, 6, 5 ... those are the ones I don’t want.’ It happens all the time.”