Auctions and market trends
-
-
-
-
Courtesy of China Guardian Auctions Co. Ltd.
Auctions shape market
Auction houses have rapidly established themselves as the dominant shapers of the Chinese art market. The appeal of auctions has been in the relative openness of the process they offer, allowing new buyers to participate without the need for ‘relationships’ with galleries or artists. To the extent that auctions also present open competition for pricing, they are also seen as ‘fairer’ than private sales, and published results are taken as benchmarks.
However, the importance of benchmarks—combined with light regulation—has led to concern over the reliability of some reported figures. The market is rife with rumours that particular record sales have been achieved by collusion of sellers and auction houses. Furthermore the inability of auction houses to enforce payment from some buyers has allowed a high price to be recorded even when the transaction was not closed. Auction practices are regulated by the Ministry of Culture, and major firms often have relatives of political figures as operating officers or major shareholders.
With a mere 10-15 year history, the Chinese auction market is now suddenly crowded with several hundred auction houses. The market seems poised for consolidation, with leading players regaining market shares and dominating transactions, in part driven by reputations for best practice that offer a guarantee to both seller and buyer.