The China Factor
With the fall auctions under way, Chinese collectors are bidding up their cultural heritage, setting new records nearly every week. 'Soon a Chinese ink painting is going to outsell Picasso.'.

Xu Qiming, the son of a farmer in Cixi, near Shanghai, has made a fortune exporting frozen eel. Now, he spends millions of dollars on his collection of Chinese ceramics. Yang Bin, one of Beijing's biggest car sellers, is a major collector of Chinese contemporary art, as is Guan Yi, the son of a chemical engineer from coastal city Qingdao, who keeps over $50 million worth of art in a warehouse museum on the outskirts of Beijing.

Fueled by the country's economic boom, Chinese patrons are now some of the art world's most powerful collectors—and they're placing their biggest bets on the art of their homeland. Bill Ruprecht, Sotheby's chief executive, said the Chinese are spending about $4 billion a year on Chinese paintings world-wide. That's more than Sotheby's and Christie's sales last year of Impressionist, modern and contemporary art combined.

The result: The art market is being transformed by the tastes of Chinese collectors—some of whom are willing to pay as much for a Qing vase as for a Vincent van Gogh painting.

"Someday soon a Chinese ink painting is going to outsell Picasso," said Joe Lin-Hill, an emerging-markets professor at Sotheby's Institute of Art, a graduate school run by an affiliate of the auction house. "That's where we're headed."

With the fall auction season under way in New York, London and Hong Kong, records for Chinese works are being broken at a regular clip. Just this week, China dominated Sotheby's $411 million round of Asian art sales in Hong Kong, while sales for Japanese and Korean pieces proved weaker. The priciest piece was an imperial Ming vase from the 13th century that sold for $21.6 million.

Younger Chinese buyers are largely sticking to modern and contemporary Asian art. Wealthy, older buyers prefer traditional Chinese pieces like jade, but a few have also been buying up blue-chip Western artists like Pierre-Auguste Renoir and Pablo Picasso. A Chinese bidder paid $21.3 million for Picasso's "Women Reading" at Sotheby's in May.

Chinese collectors may compete hardest, however, when treasures from their national landmarks turn up at auction elsewhere. In March, a Beijing collector showed up at tiny auction house Labarbe in Toulouse, France, and outbid six Asian rivals for a scroll painting that had been looted from the Forbidden City a century earlier. The winning bid: $31 million.

It amounts to a sea change for the international art establishment, which in the past has watched Europeans and Americans set trends and prices for Chinese art. Now, Chinese buyers are making decisions informed by their own cultural upbringing rather than taking their cues from the West. Take the skyrocketing prices being paid for 300-year-old brush-pots and ink-stones, elements once key to China's intelligentsia. "Nobody in the West really goes for that work," said New York dealer James Lally. Chinese collectors do, he says, because the scholar is a legendary Chinese archetype.

The phenomenon raises a question for art-market experts and art historians alike: If the Chinese value Ming vases over Claude Monet, how long will it take before the rest of the world follows suit? Christie's expert Eric Chang said such a recalibration would take time. "China has the power to decide which artists it values most now, but will the West go along with it? There's still a big cultural gap, but the West needs to start studying up."

The industry is already doing what it can to cater to this market. Christie's said it's hiring more Chinese speakers in its London and New York offices to handle calls from China; so far this year, art purchases by mainland Chinese collectors accounted for a fifth of Christie's global sales, up from 8% five years ago. An offshoot of Art Basel, the world's pre-eminent contemporary art fair, will debut in Hong Kong in late May, instead of February as originally planned, because locals said it hit too soon after Chinese New Year.

China's auction houses are also branching out: China Guardian, which sold $1.5 billion worth of Chinese art last year, will open an office in New York next month and another in London soon, said director Kou Qin. Beijing Poly, an art-selling branch of the Chinese military, may go public.

Collectors who can successfully navigate China's shifting terrain are reaping profits. Bill Carey, who oversees an art-investing firm in Missouri, Xiling Group, said his group bought a Qing vase for $1.1 million four years ago and just resold it for triple that amount. Other collectors are exploring niches that China's buyers have so far overlooked, including embroidered robes and photography.
—Jason Chow contributed to this article.

Antiquities
Around 4,000 years ago, a group of warriors in northeastern China established the region's second dynasty, dubbed the Shang. This Bronze Age civilization believed their ancestors could help them haggle with heaven; to curry favor, they lined their tombs with ornate, bronze pots filled with food and wine. Historians say some bronzes were melted down during the Cultural Revolution of 1966-76, when Mao Zedong sought to purge the country of elitist impulses like collecting art. Today, these vessels covered in swirls and animal shapes from the Shang and subsequent Zhou dynasties can sell for between $40,000 and $10 million.


Outlook: Antiquity is a new collecting area for mainland China, but prices have recently spiked. Last month in New York, Christie's got $902,500 from an Asian dealer for a late 11th century B.C. Zhou vessel that was only priced for up to $60,000. In March, Sotheby's sold a Shang-era, pot-bellied vessel with stubby legs for $410,500, nearly four times its high estimate.


Fine Print: Bidders will flinch if estimates go too high: Japan's Sano Art Museum wanted at least $1.5 million for its Shang bronze at Sotheby's last month but got no takers. Chinese laws heavily regulate the sale of antiquities within its borders, so Chinese auction houses typically don't offer the artifacts in their local sales. Collectors can still find the pieces on offer in cities like New York and London.


Lower-Priced Alternative: Funereal Han pottery jars dating to the 2nd century B.C. can be as ornately decorated as their bronze predecessors, but the Chinese shy away from some items exhumed from tombs. A pair of Han jars sold at Christie's last month for $20,000. Han's elite were also buried with miniature clay recreations of their staff and estates; prices for these rarely top $100,000.

Porcelain
After the Chinese began transforming kaolin clay into fire-hardened, gleaming white vessels about 1,800 years ago, the Italians dubbed the style porcellana, or porcelain, because it reminded them of shiny cowrie shells. More often, such pieces have simply been called china—and people have always paid a premium to own it.

Outlook: Expect more Europeans and Americans to sell their collections back to the Chinese, particularly the heavily painted Qing dishes from the 18th century that appeal to new buyers in Beijing. Last December, Christie's Hong Kong got $15.9 million for a brightly colored Qing moonflask vase from the estate of California property developer Walter Shorenstein and his wife, Phyllis. The Shorensteins paid $60,000 for the vase about two decades earlier.

Fine Print: Chinese custom gives buyers of art plenty of time to pay for their purchases. After an Asian bidder won a yellow-and-blue Qing vase for a record $86 million last fall, British auction house Bainbridges spent the better part of a year finalizing the sale with the buyer. Sotheby's now insists on upfront deposits for its "premium" Hong Kong lots.

Calligraphy & Paintings
By the time the Han dynasty came to power around 200 B.C., its imperial painters were painting on long silk scrolls. During the 7th and 8th centuries, Tang-era artists painted action sequences that unfurled with the scrolls, like a film reel. By contrast, their contemporaries in medieval Europe tended to paint frozen moments in time. Like the Dutch Old Masters, though, the Ming of the 14th to 16th centuries embedded their inky landscapes with socio-political metaphors.

Outlook: The average price tag on a classic Chinese painting at Christie's nearly doubled between last fall and this spring, said Christie's paintings expert Ben Kong. With works from the earlier Tang and Song dynasties scarce, demand has ratcheted for Ming and Qing paintings depicting mountains, rivers, birds, flowers and scenes of scholarly contemplation. Even more popular are painters from the late 19th and early 20th centuries like Fu Baoshi and Qi Baishi who wove modernist ideas—and splashier colors—into China's painting vocabulary. Qi Baishi's watercolor "Eagle Standing on Pine Tree" sold this spring for $65 million at China Guardian in Beijing.

One artist to watch: Zhang Daqian (1899-1983)—known for his indigo blue, atmospheric mountain scenes—garnered six of Christie's Top 10 prices this past spring at a Chinese modern paintings sale in Hong Kong. This week, Sotheby's got $6 million for his "Self Portrait in the Yellow Mountains." On Nov. 29, Christie's Hong Kong will offer his 1967 "Verdant Mountains and Layered Peaks After Rain," priced at $2.5 million or more.

Fine Print: Traditionally, ink-painting students have been allowed to copy their teacher's work and signature as a form of homage, which makes authentication of older paintings a challenge, dealers say. New York dealer James Lally doesn't trade in Chinese paintings for fear of misattribution. The Chinese, he said, "are more comfortable with ambiguity in their artistic attributions—differences of opinion are understood to be just part of the game."

Lower-Priced Alternative: Calligraphy can be less expensive than ink or oil paintings. The sprightly brushstrokes of Wang Duo (1592-1622) are instantly recognizable to seasoned Chinese buyers, yet his prices rarely top $1 million.

Jade
Nephrite, the stone commonly known as jade, has been prized in China since the Neolithic era. Hues vary from lentil green to honey yellow to milky white. Jadeite, a rarer cousin, also comes in emerald green and pink.

Outlook: Collectors in Taiwan dominated the high-end jade market throughout the 1980s and '90s, keeping prices steady. Mainland Chinese collectors have since stepped in, paying as much as $7.3 million at Christie's for a jadeite bead necklace last summer. Christie's says mainland buyers turned out in force for New York dealer Alan Hartman's $14.8 million jade collection five years ago. Collectors pay a premium for rare white jade; prices for yellow jade carvings, are also climbing. In September, Christie's got $722,500 for a yellow 17th-century figure of a mythical beast, nearly 10 times its high estimate.

Fine Print: Bill Carey, a Missouri collector and investor in Asian art through his Xiling Group consortium, said he doesn't buy jade because works are often difficult to date precisely: It's hard to gauge whether a stone was carved 500 years ago or 50, which can dramatically alter its historic value.

Lower-Priced Alternative: In the rush for jade, mainland collectors have largely ignored Chinese silver, including 18th-century vases decorated with similar flowery precision, said Iain Robertson, the head of art business studies at the Sotheby's Institute. On Wednesday, Sotheby's sold a small Qianlong-era silver vessel for $202,904, doubling its low estimate.

Furniture
Sometime during the reign of the Han, who ruled from about 200 B.C. to 200 A.D., China's elite shifted from sitting on mats to wooden chairs. Later, Tang rulers upgraded chair designs to include cut-out carvings and yoke-style backs; by the time of the Ming, furniture carved in boxy, polished shapes from slow-growth tropical trees like the huanghuali ("yellow flowering pear") filled just about every room in the new Forbidden City. This rare hardwood smells slightly sweet—not unlike cedar—and visiting Europeans took to calling it rosewood.


Outlook: Europeans and wealthy collectors in Hong Kong began buying Chinese huanghuali pieces in the 1920s as souvenirs. Americans followed suit in the 1970s because the wood complemented their abstract paintings and earth-toned décor. About three years ago, collectors in Beijing came in for a closer look, and now top huanghuali chairs can sell for up to $500,000 each. "Classical pieces weren't prized in China after the Cultural Revolution; people wanted a modern look," said Christie's expert Pola Antebi. Now, collectors appear to want everything from a few centuries back. Qing throne chairs and Ming daybeds are popular, in part because it's rarer to find large pieces still intact. Auction house China Guardian sold a huanghuali daybed for $2.1 million last fall, then sold another for a record $4.6 million this spring.

Fine Print: As with Colonial tea tables, the value of a piece of Chinese furniture often hinges on the extent to which it may have been repaired over time. Hire an art appraiser to check for any touch-ups.

Lower-Priced Alternative: Zitan. This purple sandalwood from China was often used for palace decor because it is harder than huanghuali. Don't set it poolside: Zitan is so dense, it sinks.

Contemporary
China's 20th-century history is one of continuous upheaval, marked by invasion by the Japanese, a civil war, the Great Leap Forward and the Cultural Revolution. Much of the Chinese art of the last several decades responds—sometimes directly, sometimes more subtly—to the Communist Party's regulation of artistic expression. Zeng Fanzhi and Yue Minjun, two of today's big names, paint masks or plastic grins on their faces to hint at hidden turmoil.

Outlook: The 1989 Tiananmen Square protests ignited the West's curiosity about China's contemporary artists, and Swiss and American buyers picked out some early Chinese art stars. Today, the market is dominated by Asian collectors—primarily buyers in Hong Kong, Taiwan, Singapore and to a lesser extent, mainland China. The past week's sales at Sotheby's underscored the trend, with Zeng Fanzhi's "Mask Series 1998 No. 26" selling to a private Asian buyer for $2.6 million, just over its high estimate. The Chinese stars initially anointed by the West are still the segment's top sellers, but the Chinese are also seeking out lesser-known artists whose works center on potent themes like political corruption. Yin Kun's "China Heroes" series depicts drooling babies in military fatigues.

An artist to watch: Liu Dan, who studied in Hawaii and New York, uses traditional ink, pencil and watercolor to paint scholar's rocks and dictionaries. Mr. Carey, the Missouri art investor, said his consortium paid more than $1 million last year for a "Dictionary" by Mr. Liu; Yahoo co-founder Jerry Yang owns another. New York collector Patty Tang bought a work of his about five years ago, but said mainland Chinese buyers are now catching on: "He moved back to Beijing, and that was it—you can't get a thing now."

Fine Print: Some works that resonate with Chinese buyers may turn off Western collectors. Wang Zhijie paints bulbous-headed young girls in seductive poses, an unnerving nod to innocence lost. "It's a little pervy, but by making the girls' features alien-like, he protects himself in a place where 'Lolita' still doesn't fly," said Heather Russell, a specialist at Artnet, whose first online-only sale of Chinese contemporary art launched last week. These pieces, and those of painter Wang Yi Dong, find few takers in the U.S., said Mr. Lin-Hill of Sotheby's Institute: "The Chinese go nuts for this stuff; we don't."

Lower-Priced Alternative: Photography. Chinese photographers are a bargain compared to their painterly peers, said New York collector Larry Warsh. Take Zhang Huan: The artist is best known now for his "ash" landscapes and Buddha sculptures, but his formative roots lie in his 1990s performance pieces, many of which are chronicled in his haunting photographs. Online auctioneer Artnet is selling a photograph series documenting his "Family Tree" performance, in which he slowly covers his face in inky names of his ancestors, for $200,000. The Museum of Modern Art owns examples Zhang Dali's photographs of Beijing graffiti; these works sell for under $10,000.