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November 2, 2011

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Auctions beckon big investors

THE autumn art auction season is underway and auction houses are assembling works for art investors' portfolios - they must include big names, like the old F4 (Famous 4) or the current F4 in China's modern and contemporary art history.

Or other famous masters, such as contemporary masters of traditional ink-wash painting.

Works are changing hands fast and auction houses are competing with each other to offer major investment opportunities.

The old F4 are Fang Lijun, Wang Guangyi, Zhang Xiaofang and Yue Minjun. These former penniless underground artists shot to fame with their political pop art that sold for hundreds of millions of yuan around the world.

The new F4 are generally considered to be Zeng Fanzhi, Liu Wei, Liu Ye and Liu Xiaodong, representing new blood in China's contemporary art scene.

If not the F4s, there must be other masters, such as ink-wash master Wu Guanzhong (1919-2010), whose "Ten Thousand Miles of the Yangtze River" (1974) will be auctioned by Beijing A&F Auction.

If it is not Wu, then works by his peers such as Xu Beihong, Qi Baishi or Zhang Daqian should be offered.

The spotlight of Beijing Poly Auction for this autumn season is an ink-wash painting created by Xu Beihong in 1951.

Beijing Tranthy Auction also highlights "Five Horses" created by Xu in 1943.

"You won't miss any of the big names at the ongoing auctions today," says Jiang Wei, the director at A&F Auction. "For a quality auction, the canvases created by Wang Yidong, Yang Feiyun and Chen Yifei, heavyweights in realistic painting, are a must."

Jiang says these names represent part of an auction's so-called "standard configuration," using a term usually applied to financial investment portfolios.

The big names are seldom available at auction in Shanghai and most major buyers and sellers do business with auction houses in Beijing.

"We have no way, since our clients just want these big shots," says a local auction house manager, declining to be identified by name.

It is the big names that bring in the big money and ensure profit.

For example, one important work by Wu Guanzhong sold for 115 million yuan (US$18 million) at this June's Poly Auction, setting an auction record for Wu.

The financialization of art for investment is evident; art is seen as an investment to offset inflation.

"These major works with astronomical price tags are good investments in recent years," says Liu Yiqian, a famous stock investor and art investor.

This May, Liu sold a painting by Qi Baishi for 425.5 million yuan - he bought it for 20 million yuan several years ago.

This price leap demonstrates that art is worth whatever someone is willing to pay for it. Investors compete with collectors at art auctions and auction houses compete among each other for coveted big-name works.

"Acquiring these works depends on your social network, your credibility, your efforts and the status of the auction house in the industry," says local art critic Zhan Hao, Some works have been consigned by extremely wealthy overseas Chinese.

In the international auction market, an important artwork might not reappear at auction within five years of sale.

"But the Chinese market has gone crazy," Zhan says. "Forget about waiting five years, even waiting two years seems unbearable. An art work sold in the spring immediately goes under the hammer again this autumn."

The high frequency of resale of big-name works demonstrates that the art market is highly speculative.

"Those involved are also afraid of who will be the last owner before a slump. Now the hidden risk is quite big," says Zhan.

Despite that, he predicts higher records will be set in the autumn sales.

Given the sky-high prices for paintings, China Guardian Auction House has successfully promoted the value of manuscripts written by old Chinese celebrities. Other auction houses also promote other kinds of art work besides modern and contemporary painting.

Jonathan Stone, managing director Asia at Christie's Hong Kong, says that Chinese collectors' tastes have expanded and are eclectic, thus, the house offers high-quality multi-category art works that have clear provenance and are fresh to the market.

China Guardian Auction
Chinese painting and calligraphy, porcelain, jade, furniture, Chinese oil painting and sculpture, rare books and manuscripts, fine jewelry and important watches.
Preview: November 8-11
Auction: November 12-16
Venue: Convention Center, Beijing International Hotel, 9 Jianguomennei St
Stamps and covers, coins, banknotes
Preview: November 12-15
Auction: November 17-22
Venue: Beijing International Hotel, 9 Jianguomennei St

Beijing Poly Autumn Auction
Preview: December 1-7, one day before each sale
Venue: National Agricultural Exhibition Center, 16 Dongsanhuanbei Rd
Auction: December 3-8
Venue: Beijing Asian Hotel, 8 Xinzhongxi St near Gongtibeilu Rd

Beijing A&F Auction
Preview: November 16-18
Venue: Grand Millennium Beijing, 7 Dongsanhuanzhong Rd
Auction: November 19
Venue: Grand Millennium Beijing, 7 Dongsanhuanzhong Rd

Hong Kong Christie's Autumn Auction
Preview: November 24
Venue: Hong Kong Convention and Exhibition Center
Auction: November 25 to 30
Venue: Hong Kong Convention and Exhibition Center


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