China’s largest auction houses plan to take on western rivals

China’s biggest auction houses plan to increase travel and open offices overseas this year as they try to take on their larger western rivals in the lucrative market for international contemporary art.

Poly Auction and China Guardian, two of the world’s largest auction houses by sales, told the Financial Times that the easing of pandemic travel restrictions would enable them to source more contemporary art, pieces of which regularly command the highest prices at auction and can rapidly surge in value.

“We are not really afraid of other auction houses,” said Jenny Lok, head of business development at Poly Auction Hong Kong, a subsidiary of Chinese state-owned Poly Culture Group. “We are actually trying very hard to see if we can get more western contemporary artist consignors.”

Poly Auction hopes to expand its overseas presence with two new offices, one in London and one in South Korea this year, Lok said. The company is part of China Poly Group, which was founded as a spin-off of the People’s Liberation Army.

She added that Poly had also promoted two new co-heads of contemporary art to help it expand from its traditional strongholds of Chinese ceramics and calligraphy and connect with more international collectors looking to sell their works at auction in China.

The global push follows the company’s first independent contemporary art evening sales last year and collaborations with Phillips in 2020 and 2021, which Lok said had helped the group “expand our client pool” further into the realm of western art.

Together with its mainland sister companies, Poly Auction was China’s largest auction house in 2021, but its sales plummeted amid a countrywide slowdown to just under $450mn last year, less than a third of their original size, according to a joint report by art fair Art Basel and Swiss bank UBS. Sales at China Guardian dropped almost 40 per cent last year to $603mn, the report showed.

China’s share of the global contemporary art market slipped to just 22 per cent last year, its lowest level in more than a decade as the pandemic hit spending habits and lockdowns impeded in-person attendance at sales, the report added.

Postwar and contemporary art is the largest sector of the global art market, with $7.8bn worth of auction sales in 2022, or 54 per cent of the worldwide total. “I think there is a lot of pent-up demand,” said Clare McAndrew, author of the report and founder of Arts Economics. “When you look at the basic drivers in terms of wealth [in China] . . . they’re still going in the same direction.”

Poly’s efforts to sell more western works on the Chinese market, however, come as Christie’s, Sotheby’s and Phillips, the world’s three major auction houses, have all announced plans to move into newer and larger Hong Kong offices as they hope to capitalise on the recovery.

Phillips’s opened its 50,000-square-foot Asia headquarters in March in the city’s West Kowloon Cultural District, while Christie’s will move into a Zaha Hadid Architects-designed building in Hong Kong’s financial district in 2024.

They will face increasing competition from Chinese counterparts when it comes to western art. “It has long been our ambition to do western art . . . But in these past three years of quarantine, we haven’t been able to travel,” said Hu Yanyan, president of China Guardian, adding that 2022 was the company’s “most difficult year”.

Before the pandemic, an increasing number of western contemporary art collectors began considering using Chinese auction houses to sell their works, thanks to growing curiosity about Chinese buying power, Hu said. “So now, we hope we can re-establish that confidence, to tell them the Chinese market is still here.”

Additional reporting by Gloria Li in Hong Kong