A report on the Chinese market produced by Artnet in cooperation with the China Association of Auctioneers that shows last year’s $6.9 billion auction sales of Chinese art were down 37% from the peak in 2011. The Wall Street Journal which revealed the study last night also reports from other sources that as much as 40% of the lots that sold for $1.5m or more went unpaid for:

The report said the high end of China’s art market took the hardest hit last year, as collectors shied away from paying premiums for pieces whose authenticity might not hold up under greater scrutiny by outside experts. Specifically, 409 Chinese works—mostly paintings or calligraphy—sold for more than $1.5 million around the world last year, down sharply from the 831 works sold at that price level in 2011. Chinese paintings and calligraphy were in greater demand among bidders within China, whereas Chinese jades and porcelain proved more popular among collectors elsewhere.

The report also found that the average price for artworks sold within China dropped by nearly a third last year to $16,300, even as prices for similar pieces remained relatively stable at houses located elsewhere in Asia, including Hong Kong and Taiwan, or in New York. Beyond China, the average sale price for a Chinese work of art hovered around $56,000, a slight uptick from the $55,600 average for similar works the year before—suggesting that collectors had greater confidence in bidding for artworks trading outside China.

China Art Market Declines More Than Suggested (WSJ)