Moving art in the market’s global hubMarch 28, 2018
Hong Kong is a global art hub that’s growing with the fast-moving Chinese economy. In 2017, the autonomous territory handled 90 percent of imports into China and 8 percent of the world’s art imports. We spoke to Tommy Chan, Fine Art Director for Hong Kong and Macau, about how the market is evolving.
Independence from China’s laws is one of the key reasons why Hong Kong is such an important location for art buyers, Tommy explains. “Censorship restricts the flow of works in China’s art market. If there’s anything with nudity or a political message, it will be difficult to clear it through customs and take it over the border. However, Hong Kong is a free port, so even a painting featuring Chairman Moa or the President can move freely here.”
A more crucial factor bringing buyers to Hong Kong is the cost of moving art into mainland China. “Investors are bringing in pieces worth millions of dollars and the Chinese government applies an import tax and duty of 20 percent (as of March, 2018) on the artwork's value. Besides, there is also a currency control policy that is applied to any transaction over CNY 50,000.00. This has been adopted to avoid capital outflow of Chinese Yuen to prevent money laundering and requires a lot of paperwork. However, Hong Kong is still tax free, so a lot of buyers and collectors like to come to Hong Kong to buy the art works and store them here. There’s no import or export tax, so it’s a paradise for investors who want to keep their artwork here.”
With China’s growing economy, art is primarily an investment for many Hong Kong buyers. As such, costs relating to the movement and storage of artwork is a crucial consideration. Tommy says this trend towards investing in art can be seen in the locations of the territory’s galleries.
“For a long time in Hong Kong, most of the galleries were located on Hollywood Road in the mid-levels,” Tommy says. “In the past five to six years well-known galleries are coming from Europe and they’ve found new homes away from Hollywood Road and nearer the central area where banks and investment companies are located. It’s a big change. It’s a hot topic in Hong Kong that more people are buying art as an investment and more art funds are being set up.”
A lot of the art that’s being bought isn’t making it onto the walls of their buyers, Tommy says, because they simply haven’t got the room. “A lot of investors who are buying in Hong Kong have just four walls in their home but they’ve got 20 art works.” This is a great news for Tommy’s business, though, he says, adding. “Investors may not put their art up in their homes and they need a secure place for it, so storage is one of the opportunities to grow Crown Fine Art in Hong Kong.”
While the market may be crowded with more art investors than art lovers, there is quite the art scene developing in Hong Kong. Galleries and auction houses have been quick to move to where their buyers are, bringing big names such as Sotheby’s, Christies, Bonham’s, Seoul Auction and China Guardian to this space-starved metropolis.
One of the most recent additions to the Hong Kong skyline is the 11-floor H Queens building, which is home to international galleries, such as Hauser & Wirth, David Zwirner, Ora-Ora and Pace. Tommy jokes that the building has been squeezed in, making it a challenge for logistics. “We are one of the three authorised providers for the new H Queen building. This is a very interesting building in Hong Kong, where we have very limited space. This building is tall and the entrance is very small, so most of the artwork needs to be hoisted up using special equipment.”
The territory is also becoming a prime location for art fairs, an ever-growing selling place in the global art market. Tommy enthuses about the amount of opportunities buyers have, saying, “Every year we have a lot of well-known art fairs, including Art Basel and Art Central. Later in the year, we’ve got Fine Art Asia and Ink Asia and plenty of exhibitions and fairs in hotels. This year we’ve even got a new addition with the Harbour Art Fair.”
Last year China claimed 20 percent of global art sales by value, boasting 14 percent growth. With that sort of growth the Hong Kong art market is an exciting place to be right now. Tommy’s optimistic about the future, saying, “Crown Fine Art is ideally placed at the center of the exciting Hong Kong art market and we’re hungry for growth.”