Wednesday, December 13, 2006

The London-based auction house, Christie's, tallied sales totalling more than $363m at its spring and autumn Hong Kong auctions this year, compared with just $100m in 2003.

In a region where a Chinese bank looking to raise $22bn can attract half a trillion dollars in initial public offering of shares orders, $19.4m does not seem that much for a piece of porcelain. The price paid for an 18th century imperial Chinese "swallows" bowl at the Hong Kong auctions of Christie's - a world record for a Qing dynasty ceramic - is a reminder that Industrial and Commercial Bank of China's mega-IPO in October was just one facet of an investment craze sweeping Asia. "What's happening to us is symptomatic of what's happening to the world," says Edward Dolman, Christie's chief executive. "It's being driven by the extraordinary amounts of cash that are around. It's a great time to be selling art."

The London-based auction house tallied sales totalling more than $363m at its spring and autumn Hong Kong auctions this year, compared with just $100m in 2003. Rival Sotheby's, which concluded its biannual auctions in the territory in October, realised sales of $246.5m. Mr Dolman credits the nouveaux riches of China and India for the current Asian art boom, but despite their enthusiasm they are still only keeping pace with their western peers.

Regardless of whether an auction is held in the US, Europe or Asia, Christie's calculates regional sales totals based on the addresses registered by buyers, providing a rare window on to global wealth creation and capital flows. This yields some distortions thrown up by tax havens, but it also shows Asian purchasers accounting for a relatively modest 10 per cent of demand. This is because the rich are getting richer everywhere, not just in Asia, and as they do so their capacity for conspicuous consumption of art is expanding. "We've never seen so much money coming in from China, Russia, Wall Street, the City, India," Mr Dolman says. "We always think, ‘Is it about to go?' But most of our clients can always afford [to buy art]. It's about how confident they feel, and there is a feeling of stability about the clients' sources of wealth."

After the stock market crash of 1987 damped demand in the US and Europe, Japanese money supported the market for another two years. Christie's thinks Asia could again account for 30-35 per cent of the market within five years. But before this happens Chinese and Indian buyers will have to demonstrate an interest in art from beyond their own regions