March 3 (Bloomberg) -- Western dealers said it might be more difficult to sell high-value Chinese works of art after a collector refused to pay for two Qing bronzes on which he had placed the winning bid at a Paris auction last week.

Cai Mingchao, an antiques collector and Chinese government adviser, bid 31.4 million euros ($40 million), at the Feb. 25 Christie’s International auction for the bronzes owned by Yves Saint Laurent, the state-run Xinhua news agency said.

Christie’s Asian department sold 372.9 million pounds worth of art in 2008, making it the auction house’s third-biggest department by revenue. Dealers said Cai’s action made a political point about artworks that China sees as looted. The risk of Chinese government disapproval might make important items connected with its emperors unsaleable without detailed ownership records, they said.

“People are now going to be much more sensitive about the issue of provenance,” the Mayfair-based dealer Roger Keverne, chairman of the Asian Art in London event, said in an interview. “If works lack a pedigree, there will be problems. These have been coming for some time.”

The U.S. State Department signed an accord with China on Jan. 14 banning the import of Chinese antiquities dating from before 907 A.D. if not accompanied by a documented provenance. The measure was passed in an attempt to combat the illicit trade in smuggled works of art, said dealers.

‘Outrageous Behavior’

“Cai has made a political point,” said Keverne. “ “It’s outrageous behavior. He’s gone for the publicity of being a martyr and a hero.”

Though a special case, the non-payment of the bill may raise concern among dealers that they might be asked to leave a deposit before bidding at auctions, said Keverne.

The bronzes had been taken in 1860 by French and British troops from the Chinese Emperor’s Old Summer Palace, Yuan Ming Yuan, five miles outside Beijing. The rat and rabbit heads, said to have been designed by Giuseppe Castiglione, a Jesuit missionary, were among 12 zodiac animals from a water-clock fountain.

“I’m not paying,” said Cai, who runs an auction house in Fujian province and who is an adviser to the National Treasures Fund, at a news conference yesterday, Xinhua reported. He didn’t say if he was bidding on his behalf or China’s.

Foreign Ministry

At a Beijing news conference today, China’s Foreign Ministry spokesman Qin Gang said he couldn’t comment on Cai’s behavior and reiterated the government’s position on the relics.

“We ask that the relics be returned to China,” said Qin. “I urge everyone to pay attention to what is the essence of this issue. These cultural relics belong to China, they were looted by the West in time of war and illegally taken abroad.”

A Christie’s spokesman in London could not say if the bronzes would be re-offered. The sculptures were consigned for sale by Saint Laurent’s partner, the Paris-based auction-house owner Pierre Berge. LCI Television yesterday reported that Berge would keep the bronzes.

“We are aware of today’s news reports,” said the London- based auction house in an e-mailed statement last night. “As a matter of policy, we do not comment on the identity of our consignors or buyers, nor do we comment or speculate on the next steps that we might take in this instance.”

Opium War

Artifacts taken from the Old Summer Palace at the end of the second Opium War had a symbolic significance for China, said Keverne.

“The ruins of Yuan Ming Yuan are a national humiliation monument,” he said.

Cai paid a record HK$117 million ($15 million) in 2006 for a Ming Dynasty Buddha at Sotheby’s, Hong Kong.

Cai had acted on the bronzes without support from the Chinese government and should answer for his own actions, Xinhua reported today, citing an unidentified official at the State Administration of Cultural Heritage, whose comments appeared in Yangzi Wanbao, a paper with nationwide circulation.

Months before the auction, Christie’s had privately offered the heads to the Chinese government at a price “significantly less than the underbidder was willing to pay,” Edward Dolman, the auction house’s chief executive, was quoted in today’s New York Times. “They rejected the offer because they thought the price was too high,” he was reported as saying.

The anonymous underbidder, also competing on the telephone, reached a hammer price of 13.5 million euros for each of the bronzes.

Asia Sales

Last month, Christie’s announced that its 2008 Asian art sales increased 15 percent on the year before. Sales in the category were the third-highest for the auction house, after Impressionist and modern, and contemporary art.

“There’s so much Chinese material in the West that the general market for Chinese art shouldn’t be affected,” the London-based dealer Nicholas Pitcher said in an interview. “The Chinese government only cares about major Imperial pieces and architectural items.”

The sale of a tiger head from the fountain of the Old Summer Palace at Sotheby’s in 2000 sparked protests in Hong Kong initiated by the city’s lawmakers. A horse head offered by Sotheby’s in September 2007 was privately bought by Macau billionaire Stanley Ho for $8.9 million and donated to China.

Ho also bought the fountain’s boar head in 2003 at a private sale and donated it to Beijing’s Poly Museum, which also has the monkey and ox. The whereabouts of the other bronzes are unknown.

“I hope a donor will step in, buy these latest bronzes and donate them to China,” said Keverne. “Then everyone’s faces will be saved.”

Western Collection

“The issue has been completely overblown,” said London- based dealer Ben Janssens. “The heads were made by a Western person in the 18th century and they’ve been in a Western collection for more than 100 years.”

The incident raised broader questions about the issue of restitution, said Janssens, who is chairman of the executive committee of the Tefaf art fair in Maastricht.

“Should every painting that Rembrandt made be returned to Holland?” he said.

The 1995 United Nations Unidroit Convention limits claims on stolen cultural artifacts to within 50 years of their theft.

(Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.)

To contact the writers on the story: Scott Reyburn in London at sreyburn@hotmail.com; Dune Lawrence in Beijing at dlawrence6@bloomberg.net

Last Updated: March 3, 2009 17:08 EST