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Original Message:   Chicanery in auctions
Remember a past thread about the unbelievable prices for Dzi beads on Chinese auctions?

Recently I read two books: Allen's Antique Chinese Porcelain: The Detection of Fakes by Anthony Allen [the author is a resident of New Zealand] The China Collectors: America's Century-Long Hunt for Asian Art Treasures by Karl E. Meyer and Shareen Blair Brysac.

Below are quoted some interesting passages from these books: ------------------------------------------------------- Selling Fakes as Genuine Antiques

Every day, both at auction or on the Internet, thousands of fake Chinese antiques are offered for sale as genuine, either through eBay auctions, on private web-sites, or on the auction sites which sell on behalf of dealers. Most are run by Mainland or ex-pat Chinese, but for a disturbing number of Western dealers entering the field. Except for when a piece is sold for an exceptionally high price (such as the USD$1.7 million vase sold by a U.S. auction house in 2013), these attract little attention, unless, as frequently happens, the buyer defaults on payment. Mainland Chinese sellers of fakes have so corrupted eBay that it is virtually impossible to buy any quality antique Chinese item from China.

The export of antiques from China has been banned now for some 65 years, with the exception of low quality items approved for sale to foreigners. Rigorously policed, at least until recently, with offenders possibly facing the death penalty, this law (and the premiums paid for antiques in China), has seen the export of antiques from China, other than looted burial artefacts, virtually cease.

The establishment of the Peoples Republic of China by Mao Zedong in 1949 was followed by a chaotic Cultural Revolution that began in 1966 and lasted until his death in 1976. This was a time of austerity where luxuries were discouraged, and few if any copies of Imperial porcelains were made in this period. It was not until 1979 that the new administration opened up relations with the West and fakes became the subject of attention of the Chinese potters.

From the late 1990's, increasing number of Mainland Chinese dealers began attending auctions in England, Europe and the North America, buying Chinese antiques at Western auctions, reselling them in some cases for massive margins to a receptive and increasingly wealthy local clientele. It was not long before dishonest dealers, both Chinese and Western, realised they could also sell fakes as genuine, so successfully that in once case a seller has accumulated over 12,000 positive feedbacks, amazingly with not one negative.

The Chinese Struggle for Learning

It needs to be remembered that from circa 1949 up until the early 21st century, Mainland Chinese were not legally permitted to own or deal in Chinese antiques, which meant the only Mainland Chinese who had access to learn about these were a small group of Government antique, Museum, or Friendship Store employees. After 1979 education on antiques for the masses therefore came from a number of books, which initially included some excellent tests (in Chinese) on a number of specialist subjects. Enterprising Chinese publishers then started printing books on Chinese auction records, complete with colour images, a short text, and details of estimates and/or prices realised. These Chinese auction record books appear to be the primary source of knowledge for Chinese dealers, as they can never have hoped to handle the actual pieces illustrated. The auction prices are manipulated by dishonest collectors and dealers intent on getting a fake provenance for their pieces, and by Mainland Chinese auctioneers who actively participate in these frauds. The New York Times (28 October 2013) reported that about half the sales of artworks valued over $1.5 million each, in China, were not paid for, yet the alleged sale prices are still stated in the mainland Chinese auction record books for the benefit of anyone gullible enough to believe them.

A major portion of the Chinese auction system is corrupt, and only a few weeks ago, I learnt of yet another attempted scam by a Mainland Chinese dealer who approached an Auckland auctioneer wanting him to sell $700,000 of fake porcelain. The seller wanted only to negotiate the commission and buyer's premium. None of the porcelain would be sold or paid for, merely knocked down to him or one of his cohorts at inflated prices. He would then offer the pieces as genuine in China, complete with provenance and illustration in the New Zealand auction catalog. Wisely, the auctioneer declined to participate.

One interesting aspect of this trade is that the majority of the vendors selling at auction, in New Zealand anyway, are Mainland and expat Chinese, who have no quibbles about defrauding their fellow countrymen. ------------------------------------------------------------------------

The China Collectors describes how Chinese auctions are used to launder money:

...art had evolved into a form of reserve currency, quickened by popular distrust of the Chinese stock market and a slowdown in the mainland housing boom. On its darker side, the market has been blamed for museum thefts and an ongoing illicit trade in looted or smuggled antiquities. At the same time, it has given a fresh twist to China's long tradition of gift giving, providing crafty local entrepreneurs with a seemingly foolproof way to "wash" a bribe. An example of how this works has been credibly described by Hong Kong's well-sourced English-language newspaper, The South China Morning Post: "It's not rocket science. A businessman gives a painting to an official, whose relatives auction it off. The businessman buys it back at an inflated price, and the official pockets the case. This leaves less evidence linking favor to bribe than handing over suitcases of cash." Thus the auction gallery can double as a money laundry.

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