More on the Size of the Internal Chinese Market for Antiquities

James Fitzpatrick has written CPAC to provide the following additional information about the immense size of the internal Chinese market in cultural goods.  The key question for CPAC and those in the archaeological community supporting restrictions is why impose them on American interests when their net effect is merely to give Chinese collectors and dealers a leg up on their foreign competition?  Is it all about conservation or control?   Mr. Fitzpatrick's letter is quoted in full as follows:

May 31, 2013

 Ms. Patty Gerstenblith

Chair

Cultural Property Advisory Committee

State Department

Washington, D.C.

Dear Ms. Gerstenblith,

In my recent comments to CPAC on behalf of James J. Lally in connection with the reauthorization of the MOU with China, I emphasized the significance of the internal Chinese market for antiquities.  I noted the failure to meet the statutory standard of effective self-help measures by the Chinese given the great bulk of the sales of Chinese antiquities (which sales presumably prompt looting) taking place within China itself and abroad, involving Chinese buyers.  Notably, one of the key archaeologist witnesses at the hearing agreed that there was a significant internal market.

To support this proposition, in his statement to CPAC, Mr. Lally noted that:

Chinese buyers of Chinese art … dominate the market outside China.  Sales statistics for the three leading international auction houses show that over 70% of the dollar volume of Chinese art sold by Bonham’s, Christie’s and Sotheby’s in 2012 was sold to  Chinese buyers. 

The Committee asked how one could make the statement that more than 70% of the buyers were in fact Chinese buyers.  In response to my inquiry, Mr. Lally made clear that the estimates came directly from the auction houses themselves upon reviewing their internal documents:

Regarding the fact that more than 70% of all Chinese art sold at public auction around the world by Sotheby’s, Christie’s, and Bonham’s was bought by Chinese buyers, that is an understatement. I did not simply look at the buyers’ lists—the names of buyers are no longer disclosed on public auction price lists—but I did gather the information directly from the auctioneers (as the State Dept.’s “researchers” easily could have done if they were at all serious about gathering facts). I asked the Chinese art department at each of the “big three” international auctioneers to review their private records and tell me what percentage of their worldwide Chinese art sales in the year 2012 were purchased by buyers resident in mainland China (including Hong Kong and Macao) and Taiwan. The auctioneers did not want to allow any comparison between one auction house and another, so I agreed not to publish separate statistics for each auctioneer, publishing only one aggregate figure for all three together. All of them reported total sales to Chinese buyers well over 70 percent and at two of the auctioneers the total was over 80 percent.

Clearly, these data are not limited to MOU-covered antiquities, but there is every reason to believe -- indeed Mr. Lally feels strongly on this point -- that the overall statistics apply across the board -- to MOU antiquities, non-MOU antiquities, and contemporary art.

As for the overall dominance of Chinese buyers for Chinese art -- and antiquities, Lally has replied:

It is true that the great majority of the published sales statistics on the internal Chinese domestic market are reporting sales of non-MOU antiquities and contemporary art. No private market statistics are available—only public auction sales statistics are published, [as noted above: more than 70% of sales made to Chinese buyers] and of course antiquities are a very small fraction of the sales volume at public auction. (The same is true in US and Europe public auction sales—antiquities of all kinds account for only a very small fraction of auction turnover). Nevertheless, the extraordinary, unprecedented growth of the art market inside China—where only Chinese art is traded, raising the turnover from zero in the mid-1980’s to a multi-billion dollar total  rivaling total sales for all art in New York and London today, does clearly indicate the strong demand for all Chinese art including ancient art in the internal, domestic market in China.

Lally has written that this fact can easily be confirmed by CPAC and its investigators and staff:

Although it is impossible to provide statistics, a strong market for ancient Chinese art does thrive inside mainland China, with active collectors and traders at all levels of the market. If you ask any informed dealer in China or Europe or America or Hong Kong everyone would say that the mainland Chinese buyers are dominant in all sectors of the Chinese art market, including ancient art, and we do have public record of strong Chinese buying of ancient Chinese art at auction in the US, London, Europe, Taiwan and Japan.

We do know that there is clearly a large public market in ancient Chinese art in Hong Kong and Macao, with public auctions and private trading of ancient Chinese art. The PRC—which has taken over those two very active trading ports more than 15 years ago—still has not taken any action to regulate the art market or even establish any cultural relics bureau office in either city. 

Why is there obvious failure of the PRC to regulate the market for ancient Chinese art in Hong Kong and Macao never discussed? If the PRC does nothing to enforce restrictions on the trade in ancient Chinese art in two of the wealthiest, most active art market cities in China, why should US customs enforce restrictions on US citizens while Chinese citizens and all other collectors and dealers and museums around the world carry on with no restrictions?

At the end of the day, CPAC should pause and consider the rationale for closing the U.S. market for antiquities while a thriving market exists for those very objects in China, Hong Kong and Macao.

A further public hearing should be convened to permit the Chinese delegation to explain why our markets should be closed, consistent with the statutory criteria, when the very same embargoed objects are freely available in the greater Chinese market.

The internal Chinese market is the key to the integrity of these proceedings.

                                                                                    Sincerely,

                                                                                    James Fitzpatrick