|Imperial Chinese Court Fan, sold for $170,000, |
Smuggling Chinese Antiques Might Be The Next Big Thing
Smuggling Chinese antiques may soon become a problem in China, smuggling out I mean, not in.
Why would I say this? Pretty simple, "Market Forces". China's economy is in a tail spin, their GDP is contracting well below their annual target of 9% and is now down into the 6.4% range. By all indications the government is no longer able to play with their currency and trade numbers enough to offset the declines on paper and the bloom is now officially off the rose. With all of this in place demand for art will slip more than it has already.
For the last two decades the prices of Chinese antiques have been on steady rise driven by an apparently unquenchable thirst to acquire objects of China's past driven by the newest of the mainland's nouveau riche.
For many dealers and collectors the last 20 years have been remarkably easy, buy something today and wait a year, then sell for a handsome profit. Now that it appears that what was once thought to be a "sky's the limit" market is heading for softer less robust times begs a few questions. Before going on, let's bear in mind taking Chinese antiques out of mainland China is and has been illegal for decades. (Now hold that thought for a moment.)
As China's economy pulls back followed by the inevitable drying up of available cash for antique purchases, some collectors will start selling a "few pieces". It always happens when economies slow down, it's how many of China's greatest treasures ended up in western museums to begin with. If things don't improve, more pieces will try and enter the market as additional owners become increasingly nervous. Soon, if not already, mainland auction results will slip further. Soon Beijing, Hong Kong and Shanghai dealers who were begging to buy inventory will be taking only consignments out of fear of tying up capital.
Pretty soon you'll have a massive concentration of fine Chinese art and antiques gathered from around the entire world and bought at the top of the market stuck in China and going down in value. With many owners seeking buyers inside a shrinking economy with equally shrinking demand, soon you have buyer's bidding downward like a "Dutch Auction"... In short, it's an economic trap.
As prices soften in China, more items in the west will find their way to auctions in order to get out of the market in exchange for hard cash, which will only exacerbate the situation further in China. Western sellers will soon be competing with those smuggling Chinese antiques for spots in auction houses in Hong Kong, London, New York and Paris.
Collecting art and paying big prices is about confidence in the market. Confidence in Chinese art as an investment has been wobbling now for a while. Many are no doubt already looking for the exits.
If you think it cannot happen, talk to an Americana or Japanese art collector. (neither did they)
and Shanghai dealers who once would gladly buy anything offered become hesitant, perhaps only taking in inventory on consignment. It could get ugly.
China's economy will continue to pull back as production slows due to reduced global output demand and increased competition from less expensive labor markets. All of it will result in a serious dilemma for Chinese antiques collectors as well as a bit of a shock.
The Solution? Smuggling!! Smuggling Chinese antiques of course!
Smuggling Chinese antiques or anything for that matter has been done for centuries. Hundreds of years ago it was first was done by the Venetians into and out of the British Isles after the first duties were put in place. The Dodges of Venice actually put in their annual budget an amount specifically for the purpose. Over the centuries everything from weapons, to drugs, human beings to national secrets have been smuggled. Cocaine traffickers have gone so far as to build submarines in recent years.
My guess is Chinese collectors and dealers will be taking part in this age old tradition before long, if they haven't already. While selling outside of China may not result in the sky high prices of a few years ago, the price declines for the early birds will be reduced by what's left of global demand elsewhere with some mainland buyers still willing to jump into the fray. No doubt many in China despite the drawbacks, will prefer very much getting their best things out as soon as they can. Smuggling Chinese antiques out of China will be the result in order for this process to begin. Before you know it the big auction houses will be facing their own dilemma, how do they explain where these things are coming from?
While smuggling is a dirty word and smuggling Chinese antiques will not be for everyone with collections in China, it will be fine with many of them.
Can Anything Stop it?Sure, if China can get a grip on it's markets very quickly and keep the confidence of the people which is already getting to be in short supply. Can Smuggling Chinese antiques be done? of course it can, take a look at all the middle eastern war antiquities loot turning up in the EU and even on eBay these days. There is always a way.
As for me, its fine, prices need to come down and it's long overdue.