More than 300,000 Chinese have a net worth of more than $1 million, excluding property, and by some estimates mainland millionaires control some $530 billion in assets. What do these folks spend their hard-earned yuan on? Mainland Chinese are the world's third-biggest buyers of luxury goods, so the likes of Gucci, Prada, and Cartier are selling billions of dollars worth of scarves, bags, watches, shoes and more to them annually. And Bentley Beijing has sold a half-dozen 728 stretch limos -- at $1.2 million each, the world's most expensive car -- more than any other dealership in the world.
But China's new-moneyed class is getting interested in more than just fast cars, designer clothes, and extravagant timepieces. Growing numbers of mainlanders are investing in art and antiquities, snapping up everything from ancient Chinese scrolls and traditional ink paintings to the works of French Impressionists. BusinessWeek Asia Correspondent Frederik Balfour spoke with Ken Yeh, deputy chairman of Christie's Asia in Hong Kong, about the auction house's efforts to woo more Chinese collectors. Edited excerpts follow:
How important is the Chinese market to Christie's?
It's very important. There is tremendous potential there, because when people have extra disposable income they will start thinking about buying art. From recent years the percentage of Hong Kong sales from mainland China has gone from zero to 20%. That's a huge increase.
What are mainland collectors buying?
First off, they will buy porcelain and Chinese scrolls and modern paintings from the late 19th and early 20th centuries. These are in the style of traditional Chinese classical painting, using brush strokes and ink and paper.
Artists include Lin Feng Mian, Li Keran, Zhang Daqian, and Wu Guan Zhong. Some local collectors will pay a huge price for those artists. I know that a Wu Guan Zhong recently sold in the mainland for about $4 million. Many local auction houses in mainland China are also doing very well.
Are mainlanders buying contemporary Chinese art?
Not that I'm aware of, though this isn't an area of my expertise. Contemporary Chinese art is bought primarily by Southeast Asians, Taiwanese, people from Hong Kong, as well as European and U.S. collectors.
What about Western art?
Eventually they will start buying Western art. There will be a very substantial increase. That's one of the main reasons I relocated to Hong Kong from New York last year. Christie's knows there is a lot of potential in mainland China, so one of my main jobs is to develop the Western painting market there.
We have done two previews of impressionist paintings in Shanghai, in advance of auctions in New York and London. In the past two years mainlanders have bid on Renoirs, Monets, and Van Goghs in New York and London auctions, though they only got the Monets. There is also a middle-aged Shanghai businessman I know of who paid $1 million for a Picasso in a private sale. I can't give more details.
Does Christies try to educate Chinese collectors?
We have been bringing the highlights of our Hong Kong auction sales of Chinese porcelain, jewelry, and watches, as well as traditional classical, modern, and contemporary art to Shanghai and Beijing. Our specialists give lectures to small groups of collectors, usually sponsored by investment banks.
Personally, I did a few talks in Shanghai and Hangzhou on how to collect to Western painting. We usually work closely with private bankers and investment bankers and invite 40 to 50 people. For example, we worked with HSBC in Shanghai in 2004. The reaction in Hangzhou was very positive about Western art. They are keen to learn and did their own homework.
So a Chinese buyer might someday purchase Van Gogh's Sunflowers?
You never know.