Profile on China Guardian Auctions: an interview with CEO Hu Yanyan

 Hong Kong  |  9 October 2014  |  AMA  |  Tweet  |  LinkedIn

Now in its third year of sales in Hong Kong, China Guardian this year realised a result of HKD343 million (€35 million). Over the course of two days of auctions, Painting and Calligraphy proved the greatest success, surpassing their spring auction results. Highlights of the auction included an under-glazed blue and yellow-enamel ‘Floral Scroll’ bottle vase from the ceramics category, and Chinese pieces reached HKD27.6 million (€2.8million). The work Aspirations by Chu Teh Chun was acquired for more than HKD8.6 million (€880,000).

China Guardian has developed considerably since its creation in 1993 and since two entities have since emerged: China Guardian Investment and China Guardian Auctions. Hu Yanyan, who has been with China Guardian since its very beginning, has been named this year as CEO of the division China Guardian Auctions. With the arrival of the autumn sales for China Guardian in Hong Kong, AMA had the chance to meet this emblematic character in the Chinese art market.

What is your background? And how did you come to be CEO of China Guardian?
I have worked with China Guardian for 21 years now. I began working in operations in the Chinese Paintings and Calligraphy department, a role which I handed over to Ms. Guo Tong a few years ago, who is now the General Manager of Paintings and Calligraphy. Paintings and Calligraphy is a category that has steadily become more and more successful.

Can you describe the evolution of China Guardian since its beginnings when you entered the company?
The growth of China Guardian was very much in line with the growth of the industry as a whole. At the beginning, the art market was almost non-existent, and in our first auction we only achieved total transactions of 14 million Chinese Yuan, but at the time it was the highest sales record.

Who are the shareholders and what is the structure of the company?
Actually the structure of China Guardian is very straightforward: at the top we have our Board of Directors — 20 years ago having a Board of Directors was something that was relatively new, though it has now become more commonplace — underneath which we have the President and Vice President, and below these we have 16 departments. Half of the departments are dedicated to the various auctions categories such as oil paintings, ceramics, etc. whilst the other half are supporting departments, such as finance, customer services etc.

How many members are there in the Board of Directors and where are they from?
There are ten members who are all Chinese.

What is the most popular department, or what are the most popular auction items in general?
Chinese Paintings and Calligraphy is the most popular category; every year we consistently see this category make up around 70 % of our total transactions.

What is the general profile of the buyers at China Guardian?
Most are individuals, as opposed to companies. We do sometimes see some museums, but the number is still limited as they are usually after very rare, specific items that are missing from their collection. Of course the most important reason is that they often cannot make the highest bids.

Only a few years ago, your activity was in its very early stages. How did you manage to grow the company into what it is today?
There are two important aspects that have contributed to our success: the first is our company philosophy of serving as an art auction intermediary, meaning we only take commission on items sold. This way we are able to operate fairly with regards to both buyers and sellers. The second important point that has helped our growth is our team’s high level of expertise. By making sure that our staff are true experts in their own respective fields, we know that we can offer our customers the best service, from ascertaining the authenticity of auction items to setting the appropriate price estimates.

These two aspects were really important in building trust from collectors and by extension China Guardian’s solid reputation. In China, one of the most important qualities that people look for in the business world is credibility.

Is it difficult to find the right staff in China?
They are really difficult to find. China Guardian has a long history in China, and 20 years ago competition from other companies was relatively low, so there were still opportunities to find the right experts. Meanwhile, over all these years China Guardian also internally trained its own staff to a high degree of expertise. Ms. Guo Tong for instance has been with China Guardian for 17 years. I have myself been with China Guardian for 20 years, and many of the other staff members have been with the company for a long time. Furthermore today there are many auction professionals in China’s auction industry that originally came from China Guardian, so it’s almost like we’re a school!

The auction market only started quite recently in China. How is China Guardian to compete with other auction houses, and how do they impact your activity?
Coming to Hong Kong was a way for us to increase the scale of our operations. We have transitioned from a domestic auction market to an international auction market, and we are already seeing key differences. For instance, at the oil painting auctions we can see that the customers are very different from those in Beijing, with a more diverse mix of Mandarin, Cantonese and English voices.

Are there other aspects that have impacted your development over the past years?
Of course, the economy has been an important factor. Over the last ten years, China’s GDP has experienced an incredibly fast development, however this may slow down over the coming years. These are other aspects that we also have to take into consideration. For every auction that we hold, we think a lot about current market trends and we organise ourselves accordingly. As a result each auction is unique, from the number of sessions that we hold to the scale of each session. The main focus usually lies on the selection of the auction items and the setting of price estimates.

Do you intend to diversify in terms of auction categories?
Actually every year we think about what new categories we can hold. For example, this year we added a red wine category in China. Over the past few years we have also added modern design. So we are always thinking about which new items we may introduce to our auctions.

Are you also interested in diversification in other markets, such as private sales, galleries, fairs, free ports, etc?
There is a new place in Beijing – Art Space (Yishu Kongjian) – where we have recently started organising some small exhibitions, and we can also hold private sales. However this is not one of main areas of focus. We don’t have any plans regarding free ports at the moment.

Poly auction recently expanded westward. Do you have any plans to expand China Guardian in the West?
In terms of consignments, our reach has extended to the US, Europe and other places already over the last 20 years. This year we are also considering whether to set up an office in Europe, possibly in Paris or London. We’ve had an office in Japan for over ten years now.

Do you think there are still gaps in the art industry in China?
I think there is still potential to improve the laws and regulations with regards to the art market. As we didn’t have such a market before, many situations had not been encountered, and therefore there weren’t many regulations. However, art transactions have now become more and more frequent in China.

To take the example of the import of Chinese art pieces back into China from consignments abroad, we could now ask if there should be some regulations put in place to encourage this type of import. Currently, there is no differentiation between the import of handbags, for instance, and the import of Chinese art pieces. But I believe the two are very different.

What is your outlook on the development of the art market in China and Hong Kong over the next few years?
In the space of 20 years, we have seen the epicentre of Chinese art sales shift from Hong Kong to Beijing. I believe this trend will carry on and become even more pronounced over the next ten to 20 years. Meanwhile, if we are to see more and more transactions of western art pieces in Asia, Hong Kong will most probably be the stepping stone. This is also one of the advantages of being in Hong Kong.

Are you happy with the results of the Autumn Auctions so far?
Well we only completed one of the categories yesterday, which is Chinese Paintings and Calligraphy. In this category we achieved a little over our results from the Spring Auctions, so we are very happy!

What is the general profile of the collectors in Hong Kong?
It depends on the categories. For the Chinese Paintings and Calligraphy session, most of the collectors are from Mainland China. Today as we have auctions in contemporary art and 20th-century oil paintings, we can see a more diverse crowd, including collectors from Taiwan, Hong Kong and other markets from around Asia. We are seeing the same for ceramics auctions.

Which was the most popular sale in this year’s Autumn Auctions?
We are still seeing most collectors drawn to the Chinese Paintings and Calligraphy category, but ceramics and jade items have seen the highest development in terms of interest.

How much of China Guardian’s overall sales do the Hong Kong auctions account for?
Around 10%.

You’ve organised sales in Hong Kong for three years now, what are the biggest changes you have noticed?
From our side the biggest change is our expansion from only two auction categories – Chinese Paintings and Calligraphy, and Furniture – to five categories currently.

What are the main differences between the auctions in Hong Kong and the auctions in Beijing?
The selection of auction items is one difference. In terms of ceramics, for example, due to regulations in Beijing we are relatively restricted in the sale of Song dynasty ceramics there, but we can auction this type of item in Hong Kong. In fact this year in our consignment process there have been increasing numbers of this type of fine ceramic items.

Are there auction items that are more popular in Hong Kong than in China?
There are indeed; for example in our Spring Auctions in Hong Kong this year we held a special session on Qing dynasty bronze, a category that is very popular on the international market. Of course this is also popular in China, but sales of this type of item are restricted. In this Qing dynasty bronze auction session we achieved a 90% transaction rate.

Hong Kong is an important platform for contemporary art, is this a category that you intend to expand?
We have noticed that contemporary art is a popular category in Hong Kong, therefore as we go through the consignment process we assign more contemporary art pieces to our Hong Kong auctions. In our Autumn Auctions for example we have a session called “The Enchantment of Neoteric Chinese Ink”, which meets the local market’s interest.

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