Seller beware: In China, if someone successfully bids for art at auction there is an almost 50/50 chance of non-payment.
Americans who do business in China know that they will be operating under unfamiliar rules. Now United States owners of Chinese antiquities are finding the same thing when they sell to mainland Chinese.
This hit me personally. I sold a 16th/17th century cinnabar box at Christies, NYC at its March 22, 2012 sale. It fetched a respectable price. Though this was cause for celebration, more than two months later I haven’t been paid. The reason according to the auction house is that the buyer didn’t reimburse them.
The large carved red lacquer globular box and cover that I sold at Christies during their March 22, 2012 sale is above. The buyer has not paid.
Photo: Courtesy Christies.
When I pressed as to whether the purchaser was Chinese, the Christie’s person wouldn’t say for reasons of confidentially; however, it’s probably a good bet. The market for antique cinnabar boxes tends to be wealthy mainland Chinese, and, unfortunately, this group is notorious for not paying for the items they buy at auction.
According to Melissa M. Chan who writes for the China Digital Times, almost half of Chinese auction bids are unpaid. Other articles, such as the one in Newsweek Magazine, reported the same scenario. Though both publications focused on Hong Kong and Asian auction houses, there is no reason the same thing can’t happen in the United States and elsewhere when mainland Chinese bid.
This problem was exacerbated recently by another wrinkle. Until now, the cost of art work imported into mainland China has been undervalued by the importer. Now the Chinese customs service is putting pressure on individuals who ship art into mainland China to declare its full value. This could add up to 35% to the cost of the purchased artwork due to a tariff.
While the auction houses wait for payment, the seller is in limbo as well. The only penalty to the tardy buyer is an administrative fee of $150 as well as storage of $12 per day (figures from Christies NYC).
So, just like American companies and entrepreneurs that frequently have difficulties opening up a business in China, a Western owner of Chinese art might experiences rough waters when selling Asian artifacts back to mainland Chinese.
The operant slogan for these sales is not “buyer beware” but rather “seller take heed.”