Chinese tycoons break records at Sotheby’s auctions in Hong Kong

Soaring Shanghai stocks, eye-watering government stimulus measures and the explosive property market in Hong Kong have combined to make the Chinese tycoon the world’s most potent new force in the world of fine art, wine and jewellery.

The rising muscle of Chinese money was allowed a six-day flexing in Hong Kong last week at a series of auctions run by Sotheby’s, in which a single six-litre bottle of Château Pétrus wine went under the hammer for HK$726,000 (£58,000). Records were set in sales of antique diamonds and furniture, and the event raised HK$1.3 billion — about 20 per cent more than estimates. One highlight of the sales was an 8.74-carat emerald-cut fancy intense blue diamond and diamond ring, which raised HK$43.8 million, a record for Asia.

Bidders in the crammed auction room described a “thrilling” atmosphere as one highly sought piece — the throne of Emperor Qianlong — came on the block. Paddles vied for attention as phone conversations with unseen buyers became more frenetic and the bids roared ahead in leaps of HK$5 million. The throne was sold to a Chinese stock market investor for HK$85.8 million in yet another record set this week.

Most spectacular, participants said, was the 88 per cent rebound in the sales total from this time last year and the tangible change of atmosphere since the disappointing Hong Kong auctions of April. Chinese buyers were confident bidders at a time when Western buyers were still nervous, the organisers said. Hong Kong, other observers added, may now emerge as the global capital of vintage wine buying as mainland Chinese wealth begins to build what eventually could become the world’s finest cellars.

As well as the confidence engendered by resurgent Chinese shares, Sotheby’s pointed to the Chinese Government’s giant stimulus package as a possible factor behind the week’s success. That, and the 60th anniversary of China’s communist revolution, had given Chinese businessmen a belief that the Government would never let any harm come to the economy, one senior Sotheby’s figure said.

Others believe that China’s stimulus measures, particularly the unprecedented splurge of state-ordered lending by the banks, may have contributed directly to the auctions’ success and the ability of tycoons to lay their hands on the necessary capital.

According to Kevin Ching, the chief executive of Sotheby’s in Asia, mainland Chinese buyers had also broken through to a new level of art appreciation and were no longer treating the sort of pieces appearing at the Hong Kong auction as mere financial assets. “These people are making so much from their businesses, they really have no need to make a bit extra from the potential rise in value of a painting,” Mr Ching said.

“At the same time, they are looking at the volatility of stocks and thinking: ‘Why not invest in something that holds its value and gives me real pleasure in the meantime?’ ”

The sales are held twice a year, in the spring and autumn.

In October last year, Sotheby’s pressed ahead with the auctions, despite the collapse of Lehman Brothers three weeks previously as well as the collapse of international credit and liquidity. The event raised about half of what was expected.

Six months later, with the global economy still in intensive care, the auctions were hampered by a collapse in confidence among sellers. Nobody believed that the market had returned, or that anyone had the money available to break records.

That relative failure, Sotheby’s said, had created six months of pent-up demand among Chinese buyers that was released in the week’s buying frenzy for oil paintings and Chinese antiques. Contemporary Chinese art, the clear favourite in the years preceding the Lehman collapse, remained less popular among buyers at the auction.