Qi Baishi becomes the most expensive Chinese painter!

Qi-Baishi-12-Landscape-Screens-WeChat-Image-1024x319

The painter Qi Baishi became the first Chinese artist to join the £100 million club at the end of last year. The week before Christmas, a set of ink brush panels entitled Twelve Landscape Screens (1925), sold for a staggering 931.5 million yuan (well over £100m.) at the Poly Beijing auction house. It is the highest price ever paid for a work of Chinese art at auction.

Only a dozen or so other works—by artists  like Warhol, Picasso and van Gogh—have sold at auction for more than the equivalent of £100 million, although a number of others have reportedly been sold privately in that price area.

There is no doubt that this work was particularly interesting and probably represented value for money as, effectively, the purchaser (unknown) did get twelve pictures for the price of one.

Hong Kong expert questions security in the China art market

As we reported ten days ago, a heart-stopping presentation during Asian Art in London, sponsored by Edinburgh-based auctioneers Lyon & Turnbull, was made by a Senior Inspector in the Hong Kong Police, also a private art security consultant, Toby J A Bull. In our view, it was probably the most significant talk in a long series of events.

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Toby J A Bull of Trackart Art Risk Consultancy, Hong Kong  Photo Paul Harris

The talk, entitled A Quest for Authenticity in the Chinese Art Market, dealt with a range of areas of concern for dealers and collectors ranging from the nebulous role of Hong Kong in the international trade to tomb robbing, fakes and forgeries, money laundering and theft. He started his presentation with a dramatic quotation from the novel The Gilded Seal by James Twining: ‘Forgery is the paedophilia of the art world. Once the suspicion is raised, you are presumed guilty, even when proven innocent. It’s a shadow that never leaves, poisoning everything you touch. So you need to be either very brave, or very sure that you’re right, before you try forgery in this city . . .’. As a result, the Hong Kong art business is a tightly held industry difficult to penetrate and opaque in the extreme.

Bull emphasised initially that he was not talking on behalf of the Hong Kong Police, although he is a Senior Inspector there. There is no art crime squad within the Hong Kong Police. As he spun his tale, however, it became quite clear why he was not talking on behalf of the Police: the Police Authority simply has no role in preventing illegal activities related to the art world.

The 1997 agreement between China and the UK specifically provided for strict Chinese laws on the protection of cultural relics NOT to apply to Hong Kong: one country, two systems. There are separate Export Laws and in terms of Hong Kong’s Import and Export Ordinance (Part IV), there is provision for a Freeport handling ‘Unmanifested Cargo’ which simply facilitates smuggling. Once goods have passed through the Freeport of Hong Kong they are effectively legitimised with all the necessary export-import paperwork. This is particularly relevant in relation to the import of antiquities to mainland China where an import duty of around 35% is imposed.

The vast volume of goods in containers means that a statistically minute proportion is ever examined. Between 1992 and 1996 (under the UK) HK$ 15 million of Chinese antiquities were seized in HK; the figure went down dramatically between 1997 and 2006 totalling HK$2.3m.; between 2007 and 2012 no Chinese antiquities at all were seized ! Many of these containers carry thousands of copies of antiquities: forgeries. Not only is porcelain copied on an industrial scale within mainland China, but, even, Kuomintang stickers to accompany items said to originate from the haul of evacuated antiquities during the dying days of the civil war 1948-49. The quality of fakes is now extremely high.

There is no unit in the Hong Kong police these days engaged in investigating illegal activities in the local art world despite the fact that large quantities of stolen and forged artefacts pass through the Freeport every week. These include the products of tomb robbing in China. Such looting “requires an elaborate, multi-layered network of grave robbers, middlemen and art dealers.” Such networks flourish in China.

Hong Kong very often benefits. In 2002, antiquities looted from eight outer temples of The Forbidden City were included in a Christie’s Hong Kong auction catalogue and were ultimately withdrawn from sale. Christie’s deemed it an isolated case’ and averred that it ‘devoted considerable resources to investigating the provenance of all objects offered for sale’.

“The majority of art is stolen for money laundering purposes and art sales are often components of the laundering process,” Bull said. The media usually reports in terms of dramatic value the stealing of works of art. This helps the criminals who will fund their ongoing activities at around 3-10% of such publicised value. Effectively, stolen art is used as a financial underpinning to the China-Hong Kong underworld.

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One of Toby Bull’s slides from his presentation    Photo Paul Harris

In Hong Kong, anti-money laundering regulatory action is based within the Anti-Money Laundering task Force (AMLTF) of which China and Hong Kong are both members. It investigates both financial institutions and Designated Non-Financial Businesses and Profession (DNBFs). Incredibly, the art market is not classified amongst the DNBF’s!

On occasion, thefts are particularly brazen. In April 2014, the Chinese mainland auctioneer Poly International held an auction in the Hong Kong Grand Hyatt Hotel where the hammer went down for the equivalent of US$3.7m. on a painting by the popular Chinese artist Cui Ruzhuo (see below). It was packed up for delivery to the buyer and stacked for collection whereupon it disappeared and has never been seen since. The Hong Kong Police were involved but were obliged to back off after Poly roundly declared it was simply ‘lost property’. Many in the Police Authority believe it was simply stolen and that Poly were keen to have the whole unedifying matter dropped . . .

 

Going, going, gone . . . but where exactly is the $3.7m. painting?

Snowy Mountain, by Cui Ruzhuo, was sold by Poly Auctions this week in Hong Kong for US$ 3.7m. But where is it?

A 28.8 million Hong Kong dollar (US$3.7 million) Chinese ink painting sold at a Hong Kong auction is missing. And the best guess is that it went out with the rubbish . . .

The painting Snowy Mountain by highly rated Chinese contemporary artist Cui Ruzhuo was sold at a Poly Auction event on Monday at the Grand Hyatt Hong Kong. But by the following day, the auctioneers had reported the painting missing to Hong Kong police.

A hotel spokesperson said it allowed police officers to view video footage from its security cameras that monitored the auction area. It is reported in local media that police officers saw video footage of a neatly packaged painting sitting near a pile of hotel rubbish that was later thrown away. Police were reported to be diligently searching a landfill in Hong Kong’s northern district of Tuen Mun for the missing painting.

Poly failed to respond to requests for comment. In a statement two days after the sale, police said the painting was now considered “lost property”. The matter was no longer being treated as theft apparently.

Snowy Mountain was the second most expensive item sold Monday at a special event that featured 28 of Mr. Cui’s ink works. His Landscape in Snow sold for HK$184 million – a record auction price for the artist. Fortunately, it was not lost . . .

Poly is China’s largest auction house and the world’s third-largest, after international powerhouses Christie’s and Sotheby’s. It is based in Beijing and began holding Hong Kong sales in 2012.

Over the past week, Poly, Sotheby’s, Christie’s and China Guardian (China’s second-largest auction firm), have held multi-day sale events spanning several categories including traditional Chinese paintings, contemporary Asian art, Chinese antiques, jewellery and wine.

Our legal expert writes: In the event of the painting not being found, a legal quagmire opens up. Technically, the legal situation is that ownership of an item sold at auction passes to the purchaser with the fall of the auctioneer’s gavel. In practical terms, if the buyer has not actually paid for it and the lot is lost by the auctioneer, his servants or agents, the buyer would most probably refuse to pay up. The situation arising has become more complicated since the imposition of Buyer’s Premium by all auction houses. This brings the buyer into a contractual relationship with the auctioneers (although, confusingly, auctioneers will always claim the relationship is with the vendor, usually unknown to the buyer). Many buyers will claim that the auctioneer owes a duty of care – that is what is being paid for with the buyer’s premium. If the buyer has, in fact, paid for the picture and engaged other parties or party to pack up and deliver the picture in question, then his claim would be against them. That may be fine if the carrier is a large international company but a small local carrier may simply have insufficient funds to make due compensation. What this incident does illustrate is the dangers auctioneers face when they sell out of relatively insecure premises – like an international hotel. Their own premises represent a far more secure environment where security and systems are well practised.

China auctions recover in 2013

jade dragon

The message is clear in recently released figures for 2013 from the major international auction houses: without sales in Asia, the market would be flat-lining and it is both there, and in the contemporary art market, where most future growth looks likely to be.

Both Sotheby’s and Christie’s sales in Asia, principally out of Hong Kong, recovered dramatically last year after a pronounced dip in 2012 (as we recently predicted would happen). Christie’s report sales up last year in Asia from US$705.4m. to $977.5m. last year. Sotheby’s increase in sales was even more pronounced: up from $5592.9m. in 2012, to $931.4m. last year.

In 2012, China’s principal auction houses had seen revenue almost halve. That trend has been sharply reversed.  At Beijing’s Poly Auctions, which is effectively government owned via the military colossus, sales leapt from the equivalent of $965m. (RMB 6.1bn.) to $1.3bn (RMB 7.9bn.). At China Guardian, the second largest auction house, sales were up from $820m. (RMB 5.2bn.) to just over $1bn. (RMB 6.6bn.). No figures have been issued in relation to hammer sales unpaid for but, after the setbacks experienced by Chinese auctioneers between 2010 and 2012, it might be assumed that they now have a handle on that particular situation.

Global results saw Christie’s easily beat Sotheby’s to the top spot with total sales of $5.9bn. with Sotheby’s managing $5.1bn. That having been said, Sotheby’s’ saw a faster year on year revenue growth of 19% as opposed to 12%. Christie’s overtook Sotheby’s in the currently fashionable contemporary art market and without that growth the two would have very much found themselves at similar levels.

Chen Chengwei tip for buyers of Chinese contemporary art

We note that yesterday Paul Fraser of the well known collectibles site paulfrasercollectibles.com, published his tips for four ‘hot’ contemporary artists who he thinks will gain wider recognition (and higher prices) during 2014. He tips Chinese artist Chen Chengwei saying ‘the hype around Chengwei is growing but has yet to reach fever pitch’.

chen chengweiChen  Chengwei : artist to look out for . . .

Chengwei, born in 1984, is already commanding healthy prices at auction in China. His works are meticulously executed in a very individual photo-realist style and, as such, represent virtually precise, richly colored copies of people and scenes depicted. For some people, they may not exactly be the most exciting or challenging works but they do, nevertheless, demonstrate considerable reserves of skill and application.

chen chengwei village memory

Village Memory

In November 2013, Beijing Huachen Auctions achieved a price of US$12,919 for his picture titled Village Memory and his total sales value at auction last year reached $442,000. His best price ever, $71,187, was achieved last year at Poly International Auction House in Beijing for China No. 4 – Beauty.

chen chengwei 'china no.4 beauty' China No. 4 – Beauty

Doubtless, we shall hear more of Chengwei in the short/medium term. Whether or not his works stand the test of time depends on trends in the wider market.