Hong Kong’s auction houses looking at a stormy 2017 if buyers can't get money out of China
Capital controls could reveal full impact of China’s economic slowdown on city’s auctions, at a time when market is facing growing competition
The global art market could look back at 2016 as the calm before the storm by this time next year.
China’s continued economic woes, the new realities of the US under President Donald Trump, the Brexit ripples through Europe, and (the latest surprise move) the reintroduction of capital controls by the People’s Bank of China – these may not put people in the mood to buy art.
That last development – the capital controls – could unmask the real impact of China’s slowdown on Hong Kong’s art market. So far, a strong desire among the super rich to send their depreciating yuan across the border by any means has helped sustain demand in local auction rooms. But now that any transfer overseas of more than US$5 million has to be vetted – and that’s just one of a raft of measures to curb rampant capital flight – the market may finally have to face up to the fact that many mainland collectors are just not making as much money.
But it is nearly Christmas, and those who have just pulled off yet another season of decent sales in Hong Kong are taking a well-earned break. For 2016 has indeed been a pretty good year, all things considered.
Perhaps ironically, the two giants of the auctions market had a couple of really good years here after the global financial crisis because of China’s quantitative easing and a rush of speculative bidders. But they have struggled to recover to those levels since.
Back in 2011, Sotheby’s two main auctions seasons here had sales of HK$7.49 billion, excluding private sales. That figure includes the fees paid by buyers to the auction house, as are similar figures quoted in this article unless stated otherwise. Christie’s total was HK$6.5 billion.
