Sunday, 8 June 2014

China Art Auctions – A Great Money Laundry by Anna Healy Fenton

After a wobble a couple of years ago, China’s art market is hot and continues to be a hot topic. Art data from Artron showed sales in China exceeded the United States for the first time in 2010. Sales in 2013 were 57 billion yuan (HK$72.5 billion).
But it’s been a bumpy ride, with a major hiccup in 2012. The China Association of Auctioneers (CAA) and international art group Artnet reported 788 auctions in 2012 made Rmb29 billion – half last year’s figure.
The 2012 -2011 wobble, according to the CAA, was due to “only half of the works offered at auction actually selling”. This can be attributed to many buyers questioning authenticity and refusing to pay. Eagle Standing on a Pine Tree, a 1946 ink painting by Qi Baishi, made a record $65.4 million in May 2011. But the New York Times noted the painting was still languishing in a Beijing warehouse two years later. The bidder had refused to pay up, doubting it was genuine.
As well as counterfeit concerns, Week in China explains that payment defaults often occur when bidders agree to sky-high valuations in an attempt to prop up prices for works by particular painters or artists that these “market makers” collect. Some auction houses look the other way as long as the (eventually aborted) sales make the market look strong. Pieces often get sold time and again. 
Reuters noted in October that a Qi Baishi painting had gone under the hammer four times in a decade, with the price shooting from $30,000 to $794,000.
You’d think the general air of dodginess would spook buyers, but demand of Chinese art continues unchecked. The reason? “The price of Chinese art is really abnormal,” Jiang Yinfeng, a painter and art critic told the Worker’s Daily. “Art has become the best tool for money laundering and corruption.”

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