News-Antique.com - Jun 03,2011 - An Art Market Bubble Chinese Style Pt. 2 artmarketblog.com
My last post generated quite a lot of discussion and debate surrounding the current state and future potential of the Chinese art market ,which I hoped it would. I used my last post to address some of the concerns I have regarding the way the China driven art market boom is progressing, as well as some issues I have with the way the media report on the art market. With this post I would like to introduce some compelling evidence in support of my opinion that the Chinese art market boom and the influence that Chinese buyers are having on the art world will have a negative impact on the global art market in the near future.
If you follow the progress of the art market you will be aware the auction houses have experienced serious problems when dealing with a number of Chinese buyers whose actions threaten to stifle the surge of Chinese buyers before it has really even begun. As reports of Chinese buyers failing to pay for antiques and fine art that they have purchased at auction continue to hit the headlines, auction houses have been forced to take action. Several major auction houses have chosen to combat the issue of non-payment by asking clients who are bidding on certain high priced lots to provide a refundable deposit before the auction takes place. This may seem like a simple and neat solution to the problem, but such a scheme is likely to cause conflict between the auction houses and Chinese buyers who are used to conducting business in a particular social and cultural environment as I will explain later.
It is important to know that non-payment by Chinese buyers is not something that has only just started happening. In fact, there are reports as far back as 2007 that express concerns over the number of instances of Chinese buyers failing to pay for art and antiques that they had purchased at auction. Since 2009 there have been an increased number of reported instances of non-payment by Chinese buyers culminating in the recent clampdown by auction houses on delinquent buyers. Excuses for non-payment or slow payment range from problems transferring money into Western currencies to issues with the legal status of objects. Many instances of non-payment, however, appear to just be the result of plain old overzealous bidding. The following is a list of alleged reasons that Chinese buyers have, or are likely to have given, for not paying for items:
1. Political statement: There have been instances where Chinese buyers have bid on items that were allegedly looted from Chinese sites then refused to pay as a political statement. The most infamous case of politically motivated non-payment is that of dealer Cai Mingchao and the bronze animal heads (pictured) which Cai purchased at the Yves Saint Laurent/Pierre Berge sale in 2009 then failed to pay for citing evidence that the items had been illegally removed from
