Art Market Monitor

Global Coverage ~ Unique Analysis

  • AMMpro
  • AMM Fantasy Collecting Game
  • Podcast
  • Contact Us

Mainland Capital Controls Hamper Art Sales in Hong Kong

March 24, 2017 by Marion Maneker

ABHK17, Levy Gorvy Gallery (Jessica Hromas for Art Basel)
ABHK17, Levy Gorvy Gallery  (Jessica Hromas for Art Basel)

The South China Morning Post reports that Mainland Chinese art collectors are having a harder time buying art in Hong Kong this week due to stricter capital controls:

“The impact of [capital controls] is very significant if you want to buy more paintings,” said Laura Chen, who came to the fair from the mainland.

That is because Chinese nationals are only allowed to convert and freely remit up to US$50,000 or its equivalent per year, an amount that can easily be breached with just a few artworks. A larger amount would need approval from SAFE. The implementation of the policy has also recently become stricter.

So how are they dealing with the problem? Reuters says they’re paying in installments with 40% of dealers having to accept payment beyond 2 months leading to these awkward situations:

Hong Kong-born Pearl Lam, who runs her own contemporary art galleries around Asia, said China’s capital controls had prompted many galleries to allow customers to pay in installments but the repayment periods had sometimes been stretched to up to three years with others not able to pay at all.

“A lot of us have got into problems because somewhere in the middle they cannot pay. So the problem is after you take a certain percentage and then they cannot follow up. What do you do? You cannot sell the painting,” Lam told Reuters in an interview.

Another dealer said 20% of their clients were paying over time, including one who structured $150k in payments over six months. Then there is this case:

A Chinese art trader based in Hong Kong said last March a buyer bought 20 items worth HK$100 million ($12.88 million) but still had not completed payment a year later, stating it was difficult to send the money out of the mainland.

Hong Kong art market takes hit from Beijing’s efforts to curb capital outflows  (South China Morning Post)

As art bonanza hits Hong Kong, China’s capital controls loom large  (Reuters)

 

More from Art Market Monitor

  • Christie’s Hong Kong 20th C & Contemporary Evening Sale Breaks a Billion HKD ($132.6m)Christie’s Hong Kong 20th C & Contemporary Evening Sale Breaks a Billion HKD ($132.6m)
  • Phillips 20th Century & Contemporary Art & Design, Hong Kong = $119.84m ($15.36m)Phillips 20th Century & Contemporary Art & Design, Hong Kong = $119.84m ($15.36m)
  • With Sales in Hong Kong, Christie’s & Phillips Test the Asian Market’s Appetite for Western Contemporary ArtWith Sales in Hong Kong, Christie’s & Phillips Test the Asian Market’s Appetite for Western Contemporary Art
  • Hong Kong Rises as Gem & Jewelry Center Reflecting Asian Appetite for Alternative Stores of ValueHong Kong Rises as Gem & Jewelry Center Reflecting Asian Appetite for Alternative Stores of Value
  • Takashi Murakami, with a Retrospective Opening in Russia, Still Wants Recognition in His Homeland Takashi Murakami, with a Retrospective Opening in Russia, Still Wants Recognition in His Homeland 
  • Is Tepid Hong Kong Sale of Warhol’s Mao a Sign of the Chinese Market’s Lack of Interest?Is Tepid Hong Kong Sale of Warhol’s Mao a Sign of the Chinese Market’s Lack of Interest?

Filed Under: Art Fairs, General Tagged With: Art Basel Hong Kong 2017, Hong-Kong

About Marion Maneker

Want to get Art Market Monitor‘s posts sent to you in our email? Sign up below by clicking on the Subscribe button.

Top Posts

  • After Pandemic’s Rapid Change, Sotheby’s Has 8 Predictions for 2021
  • For 2020, Phillips Brought in Total of $760.4 million, Down 16 Percent from 2019; Asia Sales Up 24 Percent
  • Keith Haring’s 1989 Retrospect Comes to Sotheby’s London Prints Sale
  • Soulages First Owned by Senegalese Poet-Politician Léopold Sédar Senghor Sells in France
  • Gorky, Kandinsky Works to Make First Public Appearance Since 1970s at Sotheby's
  • A Season of Resilience: Fall 2020 Hong Kong Auction Analysis
  • Tony Podesta's Secret Art Buying
  • A Season of Improvisation: Fall 2020 New York Modern and Contemporary Art Auction Analysis
  • Four of Picasso's Women Valued at $28m Come to Christie's from Rose-Walters Collection
  • Norman Rockwell's Not Gay. But Is He a Great Artist?
  • About Us/ Contact
  • Podcast
  • AMMpro
  • Newsletter
  • FAQ

twitterfacebooksoundcloud
Privacy Policy
Terms & Conditions
California Privacy Rights
Do Not Sell My Personal Information
Advertise on Art Market Monitor