Asia Raises The Gavel

When Singapore plastic surgeon Woffles Wu started buying Chinese pop art 10 years ago, there were few Asian collectors showing any interest. "It was mostly Westerners and the more-sophisticated Overseas Chinese, who didn't buy into the communist philosophy and could see the cynicism in the Chinese painters' art," he recalls.

Today, Wu is as likely to be bidding against a wealthy Chinese or Indonesian as a Western collector. Over the past few years, Asian buyers—often young entrepreneurs—have been flexing their muscles in the region's art market, helping to push prices for Chinese contemporary works to unprecedented heights. Of the 35 most expensive contemporary paintings sold at auction worldwide last year, 15 were by Chinese artists, including a large gunpowder artwork by Cai Guo-Qiang that sold for $8.5 million—a record for any Chinese painting. "Ten years ago there wasn't a lot of wealth in China, and any wealth floating around was directed at buying more-utilitarian works," says Wu. "It's only in recent years that the Chinese have realized the value of their artists and there's now a bit of nationalistic fervor in buying back art that flooded out of China."

Their enthusiasm is rapidly raising Asia's profile as a global art powerhouse. Last year China became the third largest auction center in the world with a 7.3 percent market share, still far behind New York (41.7 percent) and London (30 percent), but ahead of France's 6.4 percent. "That's pretty amazing for a market where less than 40 years ago it was illegal to own or exchange art," says Clare McAndrew, who runs the research firm Arts Economics.

Last month, Sotheby's sales of Chinese contemporary art in Hong Kong raised $51.6 million, the highest total ever for such a series. Liu Xiaodong's "Battlefield Realism: The Eighteen Arhats," sold for a record $7.95 million, while Zhang Xiaogang's "Bloodline: The Big Family No. 3," commanded an artist's record of $6.06 million. The results prove that so far, Asia's contemporary art market, like its Western counterpart, is immune to any economic downturn, as many wealthy individuals have chosen to ride out the market turbulence by parking their money in art.

For now, Hong Kong remains the force behind China's rise as the art-auction capital of Asia. Last year, following Christie's lead, Sotheby's decided to consolidate all its Asian sales there, moving its Southeast Asian auctions out of Singapore. Bonhams also opened an office in Hong Kong in 2007, and tried to differentiate itself in the competitive market by going beyond the typical sales of Chinese ceramics, Asian paintings, and jewelry and watches, recently offering Hong Kong's first dedicated wine auction in 10 years.

Two small Indonesian auction houses, Masterpiece and Larasati Auctioneers, are also readying plans to launch their first Hong Kong auctions in 2009. "Hong Kong is the New York of Asia and attracts topnotch buyers," says Daniel Komala, managing director of Larasati Auctioneers. "The fact that Macau is now the new Las Vegas of Asia provides Hong Kong with a tremendous support system. Gaming and collecting, investing in art, are the lifestyle of the new rising middle class in China and many other parts of the world." Underscoring Hong Kong's evolving status as a global art platform, Christie's will hold an evening sale of Asian contemporary art May 24—when it's afternoon in Europe and early morning in New York—to cater to as many time zones as possible.