Hammer time

Christie’s in China auction breakthrough

Hammer time

In a giving mood: Pinault with his wife, the actress Salma Hayek

This week French billionaire François-Henri Pinault returned two bronze animal heads to China. Diligent WiC readers will recall the items were first mentioned in issue 4 as part of a Paris auction that angered the Chinese government. But Pinault, chief executive of Gucci’s parent PPR (soon to be renamed Kering) said that he wanted to return the statues to “their rightful home”.

The statues, which depict the head of a rabbit and a rat respectively, belong to a set of 12 animal sculptures designed by an Italian missionary to serve as a water clock. They were seized from Beijing’s Summer Palace by Anglo-French troops in 1860. China’s State Administration of Cultural Heritage welcomed the repatriation as a “demonstration of French friendship with the Chinese people”.

The move to return the bronzes ends a controversy that erupted four years ago when they were put up for auction at Christie’s, owned by Pinault’s holding company, as part of the sale of the estate of French fashion designer Yves Saint Laurent.

The Chinese government opposed the auction of the statutes and lobbied aggressively to have its “national treasures” returned.

The timing of Pinault’s gift will strike some as having a corporate dimension: just last month Christie’s was granted a China licence, making it the first international auction house to get one. That means that it can now operate independently in China, rather than rely on a licensing deal with Chinese auction houses.

Christie’s said it expects to hold its first standalone sale this autumn. “Our opening of a proper Christie’s edifice in China is the most important thing to happen for our expansion since our arrival in New York City in 1970,” its CEO Steven Murphy told Fortune Magazine.

While the return of the bronzes elicited positive reactions online, some began to question the motives behind the move, with many seeing it as a broader PR coup for the French government.

“With two animal heads Christie’s has attracted the attention of the Chinese media and the whole country. And the result is so perfect! Not only did it receive the licence to operate in China, it even makes the French government look good. Christie’s is truly a master,” suggested one contributor.

“So 60 planes in exchange for two statue heads? Profoundly shrewd,” another wrote, referring to a deal signed by the French president for the sale of Airbus jets during his trip.

Others sounded underwhelmed by the news. One of the most circulated comments on weibo made the following argument: “As soon as the artefacts hit the auction floor the foreigners call them a ‘national treasure’ – that’s inappropriate. And for Chinese people to call what most foreigners would consider water taps as a national treasure, [the 12 animal heads, which replicate the Chinese zodiac, were part of a Summer Palace fountain that spurted water to tell the time] that’s even more inappropriate!”

Still, the licence is going to prove critical for Christie’s efforts to expand its reach in China’s auction market, the world’s largest. Last year revenues were estimated at more than $4 billion, down from 2011 but still topping sales in the US, which were estimated at more than $3 billion.

The licence does come with some restrictions, however. Christie’s will still not be allowed to auction ‘cultural relics’ – items that predate 1911 or which the authorities deem as important to national heritage. That remains a major commercial constraint: ceramics, antiques and traditional Chinese paintings make up 75% of the value of all art work sold at auctions in China, according to Artron, an industry website. The restriction means sales of these items will continue to be dominated by Chinese houses like Poly and Guardian.

Sotheby’s, another leading international house, has tried to get around the provisions by taking an 80% stake in a Chinese joint venture last September. The two foreign auction houses have also been operating in Hong Kong for years, where the same restrictions do not apply.

Christie’s new licence comes a year after the appointment of a new Chinese head. In 2012, it named Cai Jinqing as the managing director of its Chinese operations. Fluent in English and Mandarin, Cai was formerly a partner at the public relations firm, Brunswick Group, and prior to that a founder of PR firm China New Alliance. In these roles she networked with some of China’s most powerful people. For example, one key client was the Boao Forum, the Davos-like powwow on Hainan Island, where US-educated Cai became a prominent figure, sometimes acting as a master of ceremonies.

Cai also comes with family ties that straddle the worlds of art and finance. She has three older brothers, one of whom ­– Cai Jinyong – is chief executive of the Washington-based International Finance Corporation (IFC). He’s the first Chinese to hold the position and formerly ran Goldman Sachs investment banking division in China.

Her eldest brother Jindong, meanwhile, is conductor of the Stanford Symphony Orchestra (he also co-authored an excellent book on the history of classical music in China, titled Rhapsody in Red).

Auctioneer Cai – known internationally by her English name Caroline – is said to have been a key mover in orchestrating the deal to get Christie’s coveted licence. And now that her firm has secured it, she sees huge opportunities ahead.

“The reason we set up a wholly-owned subsidiary in China is not for short-term profits but a long-term strategy,” Cai told China Business News in April. She describes China’s art market as “extremely broad”, with buyers interested not only in Chinese antiques and paintings, but also in the sorts of items that more often go under the gavel in London and New York. This suggests that Christie’s Shanghai auction rooms could soon become a pivotal location for much more of the international art market.

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