More Than Half of Top-Grossing Art Auction Houses Are Now Based in China

Source: Courtesy of Christie's New York

Lotus, by Chinese artist Zhang Daqian.  Close

Lotus, by Chinese artist Zhang Daqian. 

Close
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Source: Courtesy of Christie's New York

Lotus, by Chinese artist Zhang Daqian. 

New York has had a bumpy start to the spring auction season, with 30 percent of the lots at Sotheby's Impressionist and modern art sale on May 7th failing to find a bidder. Christie's sale a day earlier was decent but not spectacular, with a $285.9 million total falling squarely within estimates.

Western auctioneers, then, could be forgiven for casting an envious glance at their Chinese counterparts, where the auction market continues to confidently grow.

In 2004, according to Bloomberg Rankings, the dollar amount of art sold in Chinese auction houses accounted for 0.7 percent of the global total. Last year it was 28.8 percent, down from a 2011 high of 41.5 percent. And this isn't a question of one or two auction houses dominating the market -- 11 of last year's top 20 grossing auction houses were Chinese.

These are not fair-weather institutions riding the current wave of a frothing art market, either -- they are well-established international powerhouses. Some of these houses, like China Guardian Auctions, (whose total sales ranked fourth in the world last year), were founded by private interests in the early 1990s. And then there's Poly International Auctions (ranked third), which is government-backed outgrowth of the Poly Group, which started as a defense manufacturer for the Chinese government. (In 2013, the U.S. issued sanctions against the defense division, Poly Technologies, under the Iran, North Korea, and Syria non-proliferation act. At the time, Poly Technologies owned 30 percent of the auction house.)

This is a dominance that experts think is likely to endure, despite the optics of the 12.7 percent dip in worldwide market share from 2011 to 2013. That is actually a sign of the Chinese market’s overall sharpening, according to John Tancock of Chambers Fine Art, a gallery with locations in New York and Beijing.

"A good number of that 41 percent [in 2011] were works that were sold and then not paid for," Tancock explains. "Then the government became aware of this, and tried to establish a more regulated market." That means, he says, that "the lower figure is where it should have been all the time."

It's not all bad news for Western auction houses: the growth of one market doesn't necessarily imply the decline of another, especially when you consider that taste is not universal. (American collectors may not be lusting after paintings by Zhang Daqian, but the Chinese artist was the auction market's top earner in 2011, with $506.7 million in revenue, beating out the likes of Picasso, Monet, and Giacometti.)

Even as China's market share has grown, the rest of the market has expanded too. In 2004, when China was but a glimmer in western auction houses' eye, Sotheby's New York and London sales were around $1.7 billion. Last year its sales in those two cities were north of $25 billion. Christie's growth has been equally steep: New York and London sales were around $1.1 billion in 2004, rising to a little more than $25 billion in 2013.

Still, there are those bumpy spring numbers to contend with. Chinese auctions, while not infallible, are demonstrating growth the people at western houses can only dream of. Between 2007 and 2013, China Guardian Auctions had a 1,119 percent increase in sales. Bonham's New York, in contrast, had a 245 percent increase during the same period. The growth numbers for the New York and London offices of Christie's and Sotheby's didn't rank in the top 20.

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