Sotheby’s Breaks into Mainland China Market
Tags: Beijing, China, GeHua, Hong Kong, Mainland China, Sotheby's
Sotheby’s has announced a $1.2 million investment in the state-owned Beijing GeHua Art Company, amounting to an 80% ownership in the company. As China restricts foreign auction houses from doing business on the mainland unless they partner with a domestic firm, this investment allows the company to extend its presence in the Chinese art market, which is currently the largest in the world.
The announcement was positive for Sotheby’s shares, which soared to $35.74 after the news broke. One report echoed the appeal of the power play, saying that Sotheby’s “brings art market gravitas (and a small investment) while Beijing GeHua Art Company brings Chinese market prerequisites.”
While Sotheby’s is already operating in Hong Kong, this partnership will allow it to enjoy a freeport that is being developed with the Tianzhu Free Trade Zone in Beijing. According to a Sotheby’s report, this freeport “will serve as a tax-advantaged storage location and provide a platform for art-related auctions and private selling exhibitions of non-cultural relics, travelling exhibitions, and educational activities.”
Meanwhile, Sotheby’s presence in Hong Kong is simultaneously expanding. It recently opened a 15,000-square-foot permanent space, allowing the company to host exhibitions year-long rather than biannually, as it had been doing in its previously rented space.
Despite recent opinions that the Chinese art market is cooling off (reports vary, with some placing China’s presence in the global market at 41% while others place it at 30%), these two latest moves by Sotheby’s indicate that the company either predicts otherwise or senses a swift and powerful rebound.
[via The Art Newspaper]
Photo courtesy of TAN