China's auction industry diversifying, going up

The nation's auction industry is booming, and more types of items are being offered than ever before, the Ministry of Commerce said on Wednesday.

A model displays the 'Pink Star' 59.60 carat oval cut pink diamond at Sotheby's in Geneva Sep 25, 2013. The Pink Star will become the most expensive diamond ever when it goes into auction next November 13 with an asking price of $60 million. [Photo/Agencies]

"With the market scale growing at a fast pace in recent years, the Chinese auction sector is becoming a major part of the distribution industry," said Zhang Shudong, deputy inspector at the ministry's department of circulation industry.

For the first three quarters of the year, turnover in the sector rose 33.4 percent to 416.9 billion yuan ($68.4 billion). That was a sharp turnaround from the 2012 full-year decline of 8.2 percent, data from the China Association of Auctioneers showed. Since 2001, the industry has grown at an annual pace exceeding 15 percent.

"Although antiques and art account for most goods sold at auction, some emerging areas including agricultural products, flowers and vehicles have also seen fast growth in the auction industry," Zhang said.

The ministry will actively encourage auctioneers to branch out into new areas and promote the auction of agricultural products, Zhang said.

In 2012, auction turnover of agricultural goods grew 31.8 percent to 2.28 billion yuan, becoming an important source of expansion for the industry. Auctions of flowers, vegetables, pepper and marine products all developed rapidly last year, the ministry said.

The nation's market is also becoming more global, as Chinese auctioneers gain competitiveness by expanding overseas and foreign auctioneers enter the domestic market, Zhang Yanhua, director of the CAA, said.

Domestic auction houses, including China Guardian Auctions Co Ltd and Beijing Poly International Auction Co Ltd, have set up subsidiaries in Hong Kong. China Guardian achieved $67 million in sales for its first auction in the special administrative region, according to the CAA.

Wang Yannan, president of China Guardian, said that auctions in Hong Kong attract both local clients and buyers from Singapore, Indonesia, the United States and various countries in Europe. The Beijing-based auction house also has an office in New York.

According to data from the French auction market regulation organization Conseil des Ventes, China Guardian is the fourth-largest auction house in the world. The top three are Sotheby's, Christie's and Poly International.

Foreign auction houses, including Sotheby's and Christie's, have established independent organizations or formed joint ventures in the Chinese market.

"The domestic auction market is open to various forms of ownership. Currently, private enterprises account for 97.7 percent of the market, State-run firms account for 0.9 percent, and foreign auction houses account for 1.4 percent, with 80 companies involved," Zhang at the ministry said.

Chinese collectors' changing tastes in art will drive the development of the nation's auction industry, according to the CAA.

Dalian Wanda Group Corp Ltd paid $28 million for the Picasso portrait Claude and Paloma on Tuesday at a New York auction held by Christie's, a significant transaction involving a Chinese company's acquisition of a Western work of art.