Chinese art market rockets – but do buyers pay up?

Sotheby’s move to seek a deposit of US$1m from bidders for premium lots in the auction of an exceptional collection of imperial Chinese porcelain in Hong Kong is believed to reflect mounting concerns about collecting payments from Chinese buyers, said industry experts.

These concerns have come to the fore following the record sale of a 16 inch Qianlong vase for £43m in a suburban England auction house in November last year.

Peter Bainbridge, whose auction house sold the vase at 40 times its estimate, has denied there were any problems with the sale of the vase to an anonymous Chinese buyer, but six months after the auction, the sale has still not been confirmed.

On Thursday night, Sotheby’s much anticipated sale in Hong Kong of the Meiyantang collection of Chinese ceramics from the 18th century garnered just US$51.2m, against pre-sale estimates of US$91m to US$137m. The sale featured 23 premium lots that required a deposit by bidders.

In late March, two auctioneers in France asked for deposits of €200,000 ahead of sales of Chinese works of art, according to Ivan Macquisten, editor of Antiques Trade Gazette in London. “British auctioneers will be looking closely at introducing deposits,” said Mr Macquisten.

Ben Brown, owner of a gallery of contemporary art in Hong Kong and London, said the decision to ask for hefty deposits by bidders was “a very unusual step probably worked out in a mutual agreement with the vendor. The vendor is extremely important to Sotheby’s”.

On Thursday night, a much vaunted 18th-century vase with a golden pheasant painted on it was, according to Sotheby’s, sold privately after the sale for HK$200m after bids at the auction failed to meet the reserve price of HK$180m.

Nicholas Chow, Sotheby’s international head of Chinese ceramics and works of art, declined to comment about whether requesting a US$1m deposit from certain bidders was a first for Sotheby’s or the reasons behind the move.

“All auction houses, whether mainland Chinese or international ones, have been experiencing delayed payments, Obviously, the problem is now large enough so steps are being taken,” said Anthony Lin, an art dealer in Hong Kong.

Other than what Sotheby’s referred to as “guarded bidding on some of the top lots” of the Meiyintang collection, the seven day spring sale was a huge success, totalling US$447m, a new record for an auction in Hong Kong.

The Meiyintang ceramics were collected by two Swiss businessmen brothers, Stephen Zuellig and his brother Gilbert, who died in 2009 and is widely believed to be the finest collection of its kind that is in private hands.