Hong Kong's impending change from British to Chinese Communist rule has led to an exodus of Chinese art, with residents sending their collections overseas out of fear that China may prevent the export of items deemed to be cultural patrimony.
Some dealers estimate the value of this precious cargo at more than $1 billion, making it a migration of artworks that rivals the Japanese purchases of Western paintings in the 1980's.
China assumes control of Hong Kong on July 1. In contrast to Hong Kong, which has virtually no rules impeding the export of art and antiques, China has regulations governing any work of art over 50 years old. Since questions about future art export policies were first raised, China has given only general assurances that Hong Kong's commercial laws will not change in the next 50 years unless the territory itself changes them. Even when pressed, officials will say nothing specific about art.
Many collectors, accustomed to buying and selling works on the free market, have therefore been seeking safe harbor for their Chinese ceramic, porcelain, bronze, jade, wood and painted works. "I've been meeting with a lot of insurance agents to appraise items that are to be shipped abroad," said Glenn Vessa of Honeychurch Antiques in Hong Kong.
Such treasures are headed to the United States, Canada, Britain, Singapore and elsewhere. Some have been placed in museums in Denver, Washington, Phoenix and other cities, occasionally as gifts but usually on long-term loan. Others are disappearing into warehouses or into the second homes that some Hong Kong residents bought overseas as possible refuges. A few have been put up for sale.
China's takeover of Hong Kong is causing other ripples in the art world, too. For a start, it has helped fuel the recent boom in Chinese art.
"The political events are certainly drawing an enormous amount of attention to China and to Chinese art and culture," said James B. Godfrey, director of Chinese art and Asian business development at Sotheby's, the international auction house. "And that," he said, "has helped generate excitement and tension in the Asian art market," attracting new buyers and pushing up prices.
Prices would climb higher still if China does limit exports from Hong Kong and Chinese artworks thus become more scarce abroad. And Hong Kong's vibrant art trade would suffer as business shifted to dealers and auction rooms in Taiwan and especially in New York City, which is already capturing an increasing share of the Chinese art market.
Smuggling of art from the Chinese mainland, a chronic occurrence that is unlikely to cease, is also expected to change. Despite the strict rules, China thrives as the source for artworks new to the market. The border authorities often look the other way as smugglers move them overland to Hong Kong and then to markets around the world. Perhaps paradoxically, smuggling through Hong Kong will be more difficult once it is part of China.
"There's a big temptation for people to move from China to Hong Kong, so the border will be reinforced" for traffic of both people and restricted goods, said Alice Lam, co-chairman of Sotheby's Asia, based in Hong Kong. Smugglers would be forced to find new channels via plane or boat.
As a result, "the market for very old Chinese art, for archeological works of art, will be very, very gravely affected," said Michael Guidhaus, a longtime dealer in Chinese art in London. "It will be possible for the Chinese to smuggle out to other places like Taiwan or Macao. But it's much more difficult and it's further away, and it will be more expensive for that reason. That will put enormous upward pressure on the works that are already out."
At First a Trickle, Now a Scramble
Art began trickling out of Hong Kong -- legally, if surreptitiously -- soon after Britain agreed to withdraw, in 1984. Some wealthy Hong Kong residents established dual citizenship, buying second homes abroad and furnishing them with their art and antiques. But many more, wanting to enjoy their possessions, procrastinated, thus setting up the last-minute scramble.
"Naturally, many put it off," said James J. Lally, who owns an Asian art gallery on East 57th Street in Manhattan. "There's been more activity in the last year."
No one knows how much more, though. Collectors are silent on their activity, afraid of attracting attention or disapproval of Chinese officials, whose vague statements that nothing will change have not assuaged their anxiety.
"The Chinese authorities say this is an overreaction, that the restrictions apply only to China and not to Hong Kong," said Philip Ng, managing director of Christie's Asia, based in Singapore. "But if you had millions of dollars in antiques, you'd rather play it safe, wouldn't you?"
To some Hong Kong Chinese, there is no debate. Art collecting is a family tradition, and many remember the Communists' rise to power nearly 50 years ago. "A lot of these families were in Shanghai in 1949 when the Chinese Communists said, nothing will happen, everything will be fine," Mr. Lally said. "And then the Communist regime confiscated their art. The Shanghai museum's best pieces are all from those private collections."
Times have changed on the mainland. Some economic freedoms have been granted. But civil and political rights have not followed. "The question is," said Constance Lowenthal, executive director of the International Foundation for Art Research, "will holders of great and important art be allowed to treat it as personal property or not?"
Anyone in China, resident or visitor, can buy antiques and artworks there. Taking them out is another matter. China has a patchwork of laws governing the export of art and antiques: the stringency of the restrictions depends on how old an artwork is, whether it is a ceramic or a painting or in another medium, the kind of wood that furniture is made of and whether something is deemed "best of type."
In general, experts said, anything 150 years or older will run up against a restriction, and some items made as recently as 50 years ago may, too. "They search at the border," Ms. Lam said. "Pieces that are allowed to leave China have a red seal."
But the laws are not always enforced, said Khalil Rizk, the owner of the Chinese Porcelain Company on Park Avenue. Gaining export approval is sometimes unpredictable. Mr. Godfrey of Sotheby's said, "Regulations don't seem to be enforced in any consistent manner."
And various smugglers have forged ties to officials who will allow some important pieces out, said dealers who spoke on condition of anonymity.
Lately, some dealers said, China has cracked down on some illicit art trade. "Mainland China is getting very tough," Mr. Guidhaus said. "They are executing smugglers." Other dealers said they believed that the border was as leaky as ever.
Officials in the Cultural Relics Bureau in Beijing "do not have nearly as much clout as the people who are profiting from this illegal trade," said Mr. Vessa of Honeychurch Antiques.
When it comes to Hong Kong, Chinese authorities may also be torn. They would like to leave Hong Kong's thriving art business alone, but they also fear losing more of their patrimony and may want to control corruption.
"It's possible they'll disregard what they've said" about allowing Hong Kong to set its own rules, Mr. Ng said. "Hong Kong is part of China, and the Chinese can do what they want."
Safekeeping of Art Preferred to Selling
So, for now, can Hong Kong residents. Only a few seem to have reacted to the potential threat of restrictions by selling their art. "It's not turning up on the market in quantities," Mr. Rizk said. "There are no shops with millions of Tang horses, because these people are not in need."
One who did sell is T. T. Tsui, a philanthropist. In November in Hong Kong and in March in New York, Mr. Tsui put his collection of pottery, bronzes and furniture on the block at Christie's. He raised nearly $16.3 million.
Many more people, Mr. Rizk said, "are sending things out for safekeeping." Second homes in such places as Vancouver, British Columbia, are the repository of choice. Families who lack safe-harbor homes are sending their art into secure, climate-controlled warehouses in Toronto, New York, London and Geneva.
"We are getting some of it," confirmed Thomas A. Pelham, a vice president of Fortress at Judson Art Warehouse in Long Island City, Queens, where 1,000 square feet of storage space rents for $2,600 a month. "It started back in 1991 and 1992, when all of a sudden we were doing more business from Asia."
It has since accelerated. Mr. Pelham will not say how much art he holds for Hong Kong residents. But he estimated that while in 1987 less than 10 percent of his Asian business involved private clients in Hong Kong, that number had climbed to 90 percent by the end of 1996. "It's still coming this year," he added.
Several museums have also become the lucky recipients of Hong Kong collections, usually on three- to five-year loans with provisions for renewal. The Denver Art Museum has three such collections: 30 pieces of Ming furniture owned by Dr. S. Y. Yip; 175 jade carvings and ornaments ranging from the 14th to the 19th centuries owned by Dr. and Mrs. Henry Wong, and more than 1,000 pieces, mostly Neolithic pots, owned by Warren and Shirley King.
Dr. Yip sent 20 more items from his furniture collection to the Phoenix Art Museum and 15 pieces of small furniture to the Arthur M. Sackler Gallery in Washington, which is putting them on show beginning on June 22.
The British Museum and the Victoria and Albert Museum in London and the new Asian Civilization Museum in Singapore are also exhibiting art sent for safekeeping from Hong Kong, various art experts said.
The owners are said to be cagey about relating the loans to the transfer of power. "If you call them, they'll say they lent it because they feel generous," said Mr. Ng, who has had extensive conversations with many Hong Kong collectors. Privately, he added, they are likely to be more truthful.
If museums are the short-term beneficiaries of the uncertainty in Hong Kong, the territory's dealers may be the long-term losers. "The Hong Kong market is in confusion," said Mr. Lally, the Menhattan gallery owner .
Many dealers say there is gloom among along Hong Kong's famed Hollywood Road, the city's antiques row. "If the Chinese impose export restrictions, that will virtually eliminate the art trade in Hong Kong," Mr. Godfrey of Sotheby's said.
Many Hong Kong dealers have been very cautious about buying works for inventory. "They don't want to hold stock there," Mr. Lally said. Mr. Vessa said that some had closed down and moved abroad. "If you walk along Hollywood Road, you'll see a lot of shops that are newly vacant," he said. Some have shipped their inventory abroad, often to Taiwan, and stand ready to relocate if the Hong Kong government does change the rules.
Mr. Ng of Christie's predicted that the Hong Kong dealers who make a living selling smuggled goods would go underground.
Increasing Interest Shown by Collectors
Interest in collecting Asian art is meanwhile growing. Dealers and auctioneers alike say the times are comparable to the art boom's peak in the late 1980's. Prices are equally high or better, and there are even more buyers, in the United States, Europe, Australia and Asia -- , including Hong Kong residents and the new rich in mainland China. "If anything, because of the uncertainties they are continuing to be strong and active buyers," Mr. Godfrey said. "There's a concern that things won't be available on the market."
This spring, both Sotheby's and Christie's had record or near-record sales in New York, with strong interest in all categories from snuffboxes to pottery to furniture. Auctions have been brisk in Hong Kong, too. Christie's described one recent sale there as a "frenzy of activity not seen since the market's height more than seven years ago."
But dealers and collectors say New York has now become the place to buy the best Chinese art. Hong Kong remains strong in Ming and Qing Imperial porcelains. But for furniture, ceramics, bronzes, archeological material and most other categories -- the fastest-growing markets -- New York has the edge, many dealers said. London, once the center of the Chinese art market, has faded.
With more and more Asians willing to travel to sales or use the telephone to buy, the auctioneers and dealers expect New York's share of the market to grow. And any restrictive moves in Hong Kong would hasten that trend.
Some Hong Kong residents are putting on a brave face. "No one is saying they will bring these restrictions into Hong Kong," Ms. Lam said. They can only wait and see what happens after the Chinese flag is raised at midnight on July 1.