When Cost Doesn’t Matter: The China Syndrome
In the antique business, when cost doesn’t matter, prices soar and the market is chaotic.
In March, a white jade Chinese vase – valued at about $40,000 – went on the block at Elders Fine Art & Antiques and sold at auction by iGavel to an off-shore, Asian collector for $300,000.
The huge difference between the estimated value and sale price was just one of the most recent symptoms of “the China Syndrome” – as Chinese collectors with coffers filled by the country’s booming economy seek to repatriate Chinese antiques, artifacts, and fine arts.
“Price is no object for these buyers,” said Worthologist Fred Taylor. “It really warps the market.” As a result, the prices for Chinese porcelain are now vastly higher than comparable Japanese or English pieces.
For example, in 2006, Taylor said, a pair of porcelain cups from the Qing Dynasty went to auction valued at $500 to $1,000 and sold for $26,500.
Worthologists caution that while the prices may be soaring this remains a tricky market – where some auctions bring record sales and others fail. “Sometimes there may be a backlash against an auction house or seller among some of these buyers,” Taylor said. “You don’t really know what is going on.”
The syndrome’s beginnings are traced, by some experts, back to a week in June of 1999 that opened with a Christie’s auction where Chinese collectors first drove up prices on pieces, such as a Qianlong vase to almost three times the valuation for a sale price of about $206,000.
A day later at a Sotheby’s auction prices skyrocketed again to double or triple the estimated values. A Yongzheng blue and white double gourd valued at $93,000 sold for $178,600.
Among the reported players in this market has been Xu Qiming, China’s biggest exporter of eels, and Lu Hanzehn, a major tire manufacturer.
In 2005, Christie’s put a rare 14th Century Chinese porcelain jar on the block expecting it would fetch $1.8 million. In brisk bidding that saw three bidders chase the jar to $3 million, the winning, anonymous collector paid almost $28 million – a world auction record for any Asian work of art.
“Many collectors are also investors and they are seeing Chinese art as part of their portfolio,” Pola Antebi, director of the Chinese ceramics and art for Chrisitie’s, told the London Daily Telegraph after one of the big auctions. “But Chinese are also proud of their heritage, and as they become more affluent, they are buying back more of their old imperial objects and paintings.”
The Chinese syndrome is, however, simply part of a bigger, recurring cycle in the world of art and antiques.
“In the auction and sales world this is not an unfamiliar theme,” said Worthologist Christopher Kent. “When the French government placed a condition on the sale of anything 18th century to be treated as an export, the prices went through the roof.”
“The Chinese, like the Koreans and the Russians, when they have the money, want their stuff back,” Kent said. “So now the Chinese want their heritage back. The shell game here is to inflate the value, so even if they don’t get their stuff back they can gloat that the unsuspecting can be screwed in the process by paying inflated prices and in the process create a false market. False markets are created all the time, there is no rhyme or reason.”
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