March 22 (Bloomberg) -- When the bidding for an 8-foot-wide painting by Chinese artist Yue Minjun reached $1 million yesterday at Sotheby's, whistles rang through the quiet New York salesroom.

Fueled by three determined phone bidders, the 1993 painting ``Goldfish'' ended up fetching $1.38 million, an auction record for the artist. It shows 15 toothy, grinning caricatures of Yue standing on a bridge, looking down at a single goldfish swimming in a dark blue stream.

``Anyone else who desperately needs it?'' auctioneer Henry Howard-Sneyd asked before bringing down the gavel and ending a bidding war that started at $320,000.

The painting was one of 310 lots that brought in $25.35 million, just above the high presale estimate and almost double the total of the same sale last year. Still, the mood was generally subdued, compared with the excitement last year over Sotheby's inaugural auction of contemporary Asian art in New York.

``Euphoria seems to be ending,'' said Los Angeles dealer Marc Richards. ``Maturation is starting.''

Yue, who represents the post-Tiananmen Square ``cynical realism'' movement, was one of three Chinese artists whose works sold for more than $1 million at yesterday's auction.

Zhang Xiaogang's 1994 oil-on-canvas ``Bloodline: Three Comrades'' fetched $2.11 million and went to a private European collector. Five of the session's top 10 lots were paintings by Zhang, whose auction record is $2.32 million for a Tiananmen Square painting sold last November at Christie's in Hong Kong.

`Five Pointed Star'

A more surprising result was the $1.22 million paid for a 1999 oil painting, ``Five Pointed Star,'' by neorealist Leng Jun. The work set an auction record for the artist and marked his debut at an auction outside mainland China.

``There's still unknown territory,'' said Elaine Ng, editor and publisher of Art Asia Pacific Magazine. ``The market is stabilizing and diversifying to include other genres which are important in the canon of contemporary Chinese art.''

Michael Goedhuis, owner of galleries in New York and London that specialize in contemporary Chinese art, said, ``There's an astonishing scarcity of good material'' in the field.

The reason, he said, is twofold: There are ``80 to 100 artists of international stature in China,'' he said. ``There are suddenly a hell of a lot of people trying to buy'' first- rate pieces.

Failed Sales

At Sotheby's, 24 percent of lots failed to sell, including two pieces by Zhang, with presale high estimates of $550,000 and $700,000.

``It wasn't like last year when people were buying anything just to have something by a Chinese contemporary artist,'' said writer Lawrence Schiller, who has bought 60 works by Chinese artists in the past two years. ``They didn't have that knee-jerk reaction to buy. If it was mediocre, people weren't spending the money.''

The Sotheby's salesroom was filled with Asians, including representatives of Poly International Auction Co., run by a subsidiary of the state-owned China Poly Group Corp. The company is planning to open its first New York office this year to boost consignments from American collectors and attract them to its Beijing salesroom, said Chang Tianhu, director of the Poly auction house's contemporary-art department.

``The important Chinese buyers are looking at Western buyers for direction,'' Chang said through a translator. ``Once they start participating in the buying, the prices will increase.''

(Katya Kazakina is a reporter for Bloomberg News. The opinions expressed are her own.)

To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net.

Last Updated: March 22, 2007 00:09 EDT