Gold brush

24 September 2012 By John Foley Follow @johnsfoley

Sotheby’s plans to launch direct sales in China. No wonder – the country now makes up 41 percent of global art sold at auction. Changing tastes and wealth play a role, but the real secret ingredients of China’s flourishing market are capital flight and financial repression.

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Sotheby’s, the auction house, on Sept. 21 said it had signed a joint venture that would allow it to run art auctions in mainland China. Foreign auction houses were previously not allowed to run sales directly in the mainland, which limits Sotheby’s and rival Christie’s to making transactions in other locations like Hong Kong.
The joint venture will see Sotheby’s invest $1.2 million for 80 percent of the venture, with state-owned enterprise Beijing Gehua taking the rest. Sotheby’s will nominate four of the venture’s five board directors and will manage the operation on a day-to-day basis.
A week-long sale of Asian art in New York this September generated sales of $91 million for Sotheby’s and Christie’s, against expected proceeds of $60 million. An inked handscroll entitled “Seclusion Amid Mountains and Streams” sold for $3.2 million, around five times the estimated price.

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