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A leading China auctioneer holds a debut sale in Hong Kong on Sunday, lured by the city’s international buyers, low tax regime and stable regulatory framework in a trend that could bring more competition for global firms.
China Guardian’s sale of Chinese art and classical furniture follows its rise as the world’s third largest auction house on the crest of China’s art market boom, with sales of US$1.77 billion last year.
“We want to win over more overseas market and buyers,” said Wang Yannan, the president of China Guardian and the well-connected daughter of former Communist Party leader Zhao Ziyang.
The sale, though relatively small, is seen as a symbolic foray by China’s top auction firm into the turf of goliaths Christie’s and Sotheby’s who have long dominated international auction hubs like Hong Kong, New York and London.
China Guardian’s key rival, Poly International is also planning an inaugural Hong Kong sale in late November, while A&F Auction and Beijing Rongbao Auction aim to enter Hong Kong in one or two years, according to art market reports.

China’s wave of millionaire buyers and investors have helped propel Hong Kong into the world’s fourth largest art auction hub, with nearly 7 per cent of global art auction revenue last year, according to French art database Artprice.com.
“It’s great for competition,” Francois Curiel, Christie’s Asia president, said. “Whenever I see more auction houses coming into the market, the pie became larger.”
Some, however, felt the field was getting crowded.
“It’s like separating a bowl of rice into two,” said Tim Lin of the Lin & Lin Gallery in Beijing and Taipei, referring to increased competition for Hong Kong’s multi-billion dollar art auction market.
“How long will they last? It’s everyone’s guess.”
Art dealers and experts say the Chinese expansion into Hong Kong is also being driven by a tightening regulatory environment in China that has grappled with widespread art crimes including tax evasion, a proliferation of fakes, money laundering and manipulative bidding practices.
In April, a large-scale Chinese customs probe into tax evasion on art imports delivered a blow to the art market, with at least six prominent art dealers, collectors and artists being investigated, according to art dealers and Chinese media reports.
“The tax probe had a huge impact on the spring auctions in China,” said the owner of an art gallery in Taipei who is a frequent buyer in the Chinese art market but who declined to be identified because of the sensitivity of the matter.
“Everyone finds himself in danger so the market is extremely cold.”
According to market research firm ArtTactic, total auction sales this spring from the biggest four auction houses in the China market dropped to US$1.5 billion, 32 per cent lower than the autumn season last year and 43 per cent less than a year before.
“The tax investigation has cast a shadow on the Chinese art market,” said David Lin of Taipei’s Lin & Lin Art Gallery.
“It has a psychological effect on buyers and sellers in China ... The chain reaction is going to last for a while.”
China Guardian’s this year auction sales tally dropped 46 per cent to 2.14 billion yuan (US$340 million) this spring season, from 3.98 billion yuan in the last year autumn auction, but Wang attributed this largely to a stuttering Chinese economy.
“It also has something to do with the slowdown in the economy, but it has nothing to do with the tax,” Wang of China Guardian, said.
Art market experts, however, say Hong Kong’s laissez-faire economy, solid regulatory framework and zero-tariffs on art imports, make it a secure and stable alternative for China’s auction firms.
Although Beijing has lowered its import duties on arts to 6 per cent from 12 per cent since the beginning of this year, another 17 per cent of value-added tax still poses a huge burden to Chinese auction houses.
“Hong Kong is a more liberal tax region,” said Simon Young, a law professor at the University of Hong Kong.
“One would have wondered why they didn’t move sooner.”


China art auctioneer debuts in Hong Kong market

An art buyer makes a big at China Guardian's debut sale in Hong Kong on Sunday. Photo: Edward Wong

Art buyers browse a catalog at China Guardian's debut sale in Hong Kong on Sunday. Photo: Edward Wong

China Guardian’s sale of Chinese art and classical furniture follows its rise as the world’s third largest auction house on the crest of China’s art market boom. Photo: Edward Wong

“We want to win over more overseas market and buyers,” said Wang Yannan, president of China Guardian. Photo: Nora Tam

China Guardian Auctions plans first sale in Hong Kong

China Guardian Auctions' Wang Yannan says an expansion into Hong Kong is logical. Photo: Nora Tam

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