In her long piece on ArtBasel Hong Kong, Barbara Pollack, who boasts a long tenure covering China and its wary embrace of art, has this nice pocket history of Hong Kong’s rise on the art market:
Hong Kong has […] come a long way. Six years ago, the city was a sleepy backwater, art-wise, with only a handful of galleries and no major contemporary art museum in the works. At that time it appeared that Beijing—with its 100,000-plus artists and 400 galleries—would be the art capital of Asia, with Shanghai, which had its own burgeoning art fair and gallery district, in second place. But the mainland market faced two major obstacles. First, sales of art in mainland China incur a whopping 34 percent value added tax (VAT), making it almost impossible for foreign dealers to make a profit at mainland art fairs. Another hindrance was government censorship—the Ministry of Culture regularly plucked works out of booths. And hence, the rise of Hong Kong. In no small part due to the success of Art HK, the Hong Kong government started putting substantial muscle into the local art scene, first and foremost into the massive West Kowloon Cultural District with its $2.8 billion budget and planned M+ museum. That infusion of money and interest attracted Western dealers like White Cube, Gagosian, Emmanuel Perrotin and Lehmann Maupin, all of whom have opened galleries here in the past two years. Meanwhile, Christie’s and Sotheby’s have been holding auctions here since the late-1980s, more aggressively in recent years, and Hong Kong is now the third-largest auction market in the world.