February 9, 2006:

[achtung! kunst] *market* : Chinese Collectors Resist Investing in Western Art

NYT, February 4, 2006
Chinese Collectors Resist Investing in Western Art

HONG KONG, Feb. 3 — As with many mansions and luxury apartments of the emerging commercial elite across China, Linus W. L. Cheung's elegant home overlooking Victoria Harbor here is almost entirely decorated with Chinese art.
[image] Picasso's "Mousquetaire à la Pipe" on display in Hong Kong in 2004. (Bobby Yip/Reuters)

A large, very heavy abstract bronze by Zhu Ming, a living Taiwanese sculptor, stands in the living room in front of a plate-glass wall with breathtaking views of the city skyline below. Two lovely scrolls by Qi Baishi, a mainland Chinese painter who died in 1957, are suspended at the entrance to the room. In the master bedroom, near another sweeping view of the city, hangs a large canvas in somber shades of blue by Lin Fengmian, a Chinese painter who died in 1991.

But in a corner of the living room, next to one of the Qi Baishi scrolls showing a magnificent predatory bird against a large, red sun, is another kind of art, seen less often here. It is an unsigned charcoal sketch of two boys that is attributed to Monet, which Mr. Cheung, the retired chairman of Hong Kong's main phone company, bought at a Sotheby's auction in London.
[image] Linus W. L. Cheung (Paul Hilton for The New York Times)

China's spectacular economic rise over the past quarter-century has started to create enormous wealth, and prices for Chinese art have risen steeply, especially in the last three years. But Chinese art collectors have barely begun to show interest in Western masterpieces.

Japanese banks, insurers and individuals shook the art world with their purchases of van Goghs, Renoirs, Modiglianis and Picassos when their country's economy seemed unstoppable in the late 1980's. Oligarchs from suddenly oil-rich Russia have made their presence known in the art market. But wealthy Chinese have been leery of investing their own sudden gains in Western art.

Mainland Chinese collectors have purchased a minor Picasso and a Renoir in the last two years and have bid unsuccessfully on a couple of Monets and a van Gogh drawing, said Ken Yeh, the deputy chairman of Christie's Asia. Hong Kong collectors, more cosmopolitan because of the territory's history as a British colony until 1997, have been somewhat more active, buying a Picasso, a Léger, a Degas, a Renoir, a Pissarro, a Monet, a Matisse, a Cézanne and an early drawing by van Gogh.

"In mainland China, it's still a bit early for Impressionist, Modern paintings," Mr. Yeh said.

But few doubt that in the years to come, wealthy Chinese on the mainland and in Hong Kong will become important buyers of Western art.

"In China, it's not enough just to be rich, you've got to be cultured," said Oscar Ho, the founding director of the Museum of Contemporary Art in Shanghai. "The younger ones have such a passion for Western stuff that it's just a matter of time before you see a demand for Western art."

Christie's and Sotheby's are trying to accelerate that process, and have started shipping costly Impressionist paintings to Hong Kong in the past two years for previews before auctions in New York and London. (Before 2004, they seldom shipped even less expensive Western art here for previews.)

As part of the new trend, an exhibition here by Sotheby's on Jan. 17 and 18 drew particular attention because it featured a well-known Gauguin painting from 1902, "Deux Femmes," with an estimated price of £11 million to £14 million ($19.4 million to $24.7 million), as well as works by Monet and Picasso.

The paintings are to be auctioned in London on Tuesday. But Henry Howard-Sneyd, the managing director for Asia and Australia at Sotheby's, said that while some Chinese collectors were likely to attend, he was doubtful they would make any significant purchases.

"They haven't shown yet the willingness to pay the kind of money Westerners pay," he said.

China's total economic output now is a little over half of Japan's in 1990, but China has 10 times as many people as Japan had when its economy was riding high. So while some Chinese tycoons have clearly grown wealthy, their country remains poor: economic output per person was $1,740 last year, compared to $29,600 in Japan 15 years earlier.

Tax rules in Japan encourage the choice of art as an investment, but the tax systems in Hong Kong and mainland China do not. Mainland China taxes imports of art and limits the ability of wealthy citizens to take large sums of money out of the country, which makes it harder for them to bid at Western auctions.

Sending a valuable painting to mainland China as air cargo, the way most art is shipped, results in a delay of three or four weeks on arrival for customs clearance, even if the painting is to be exhibited but not sold in China. So auction house employees carefully package the smaller artworks and take them as checked baggage when they fly to China, quickly clearing airport customs controls. Mr. Yeh said that the theft of checked baggage had not been a problem, but that size limitations on checked baggage had kept larger paintings from being shown in mainland China.

Most paintings scheduled for exhibition to Chinese buyers are brought instead to Hong Kong, a duty-free port where air cargo clears customs in less than a day. China lifted most restrictions two years ago on Chinese citizens who want to visit Hong Kong, as a way to help revive a Hong Kong economy crippled by an outbreak of severe acute respiratory syndrome, or SARS, in early 2003.

Hong Kong presents its own special challenges. Hot, smoggy, very humid weather from late April through early October rivals New York City's stickiest August days. While exhibition sites are air-conditioned, auction houses are still leery of shipping artworks here in the summer, and do not send fragile works.

"We would tend to send pieces that can comfortably stand the journey," Mr. Howard-Sneyd said.

But the biggest obstacle to selling Western art in China is its low profile among potential buyers, especially older tycoons.

Shanghai was a cosmopolitan city in the 1920's and 30's, and many wealthy Russians took refuge there with their Western art collections after the Bolshevik Revolution in 1917. A few prominent Chinese painters, including Lin Fengmian, studied in France between the two world wars.

But the Communist takeover in 1949 soon led to an emphasis on art as propaganda. During the Cultural Revolution in the late 60's and early 70's, Western paintings were burned and Chinese painters who displayed Western stylistic influences were forced to destroy their work and in some cases were imprisoned or killed.

Although government discouragement of Western art has disappeared since the death of Mao Zedong in 1976, Mr. Cheung said that in mainland China and in Hong Kong, interest in Western art was largely confined to people in their 40's and younger who attended Western schools for at least part of their education. Internet millionaires and financiers have shown much more interest in art purchases, he added, than have manufacturing bosses and property tycoons.

But Mr. Cheung said that his dwindling success over the last decade in bidding for ever pricier Chinese art suggested that increasingly prosperous mainland Chinese could someday become important buyers of Western art as well.

"From 1995 to 2000, nobody could beat me because I earned in Hong Kong and spent in China," he said. But recent auctions in Beijing have been very different, he added. "Now it's the other way around: I got squashed, absolutely squashed."




with kind regards,

Matthias Arnold (Art-Eastasia list)



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