Rumors that China Guardian, the second-largest auction house on the Chinese mainland, intends to open offices in New York and London havebeen circulating for a month or two. Now the auction house is finally ready to say that their plans are concrete.

So, why would Guardian come to New York? The company has said publicly that it isn't interested in opening auction houses outside of China. But there's plenty of Chinese art here that Guardian would love to take back to Beijing, and the real goal of the U.S. office is to solicit consignments. The office will also serve as the hub of a fact-finding mission, allowing the company to gain a better understanding of how its tremendously profitable counterparts here work, particularly Sotheby'sand Christie's.

Kou Qin, the director and vice president of Guardian told ARTINFO that, considering the way the market has grown in the States, "the U.S.can be an example for the future Chinese market." It's clear that he's visited his competition, and has taken copious mental notes. Kou laid out for us his vision for Guardian's future.

ENHANCE ITS BONA FIDES AMONG COLLECTORS 

"The U.S. art market has such influence and credibility," he continued. In China, however, "collectors love art but don't have experience," he said. "We are trying to build up the credibility of the buyers." Kou said Guardian is also trying to shore up the reputation of the auction house itself, which has suffered under allegations of selling inauthentic work — a symptom of the Chinese auction market's relative immaturity in general. Guardian has only been in operation for 20 years. Its main competition, Poly International, began holding auctions only six years ago. 

To bring business up to international standards, Kou said he would like to adopt the system of authentication practiced by auction houses in New York and London. Currently, he said, authentication is not the number-one priority at many Chinese auction houses, which under Chinese law are not responsiblefor the authenticity of works they sell as long as they publish a disclaimer.

The American and British houses, on the other hand, "are running a business where they can guarantee fairness and a 'scholarly standard' in their activities," he said. The fact that Christie's and Sotheby's have experts who are responsible only for authentication and standards — not merely for pricing or selling a work — "enlightened me a lot," he added.

In regard to the $11.4 million fetched by Chinese auction house Beijing Jiuge International for a work sold as a painting by modern Chinese master Xu Beihong but now thought to have been an art school class exercise from the 1980s (long after Xu's death), Kou said, vaguely, that the auction house still doesn't "know what will be the final result." In defense of Chinese auction practices, he said that "doing the authentication of artworks, the valuation of artworks is a very complicated job," and that the "real" experts in China stay away from the media, so those who do get quoted — in stories about subjects like the Xu Beihong scandal — tend not to know what they are talking about.

Chinese auction houses, he added, aren't the only ones with authentication and corruption issues. "I've also heard that there are some museums in Europe that have controversial works in their collections," he said. "But authentication and valuation will become a very important aspect inthe future" for Guardian.

BECOME CHINA'S MOST LUXURIOUS AUCTION HOUSE

Authentication issues aside, Guardian is making a moves to be the Rolls-Royce of China' auction world. Kou said he isn't interested in gaining clients by lowering prices. He would rather provide better service. "The auction house needs to be appraised by the customers," he said. "We don't like unhealthy competition — for example, trying to compete by lowering commissions. Twice we were the first to raise premiums at our auction house."

Prior to 2007, Guardian charged 10 percent of the hammer price to both buyer and seller on every sale. Since then, however, the auction house has moved to make its premiums more like that of its competitors abroad, raising them to 12 percent in 2007 and to 15 percent last year. According to Kou, the premiums have gone up as costs had gone up. In the last few years, Guardian has vastlyexpanded the geographical areas in which it solicits consignments, venturing beyond Hong Kong and Taiwan to Europe, the United States, and Australia. "Wherever there are Chinese artworks we will go there and pay attention," he noted.

EXPAND, EXPAND, EXPAND

The majority of Kou's business is in Chinese traditional art, and most of Kou's clients are focused on collecting traditional objects. "That taste cannot be changed in a short time," he said. But looking ahead to the future, he said that he can see opening up the auctions to a range of categories, like auction houses in New York and London do. "We are looking to expand our auction categories to everything that can be collected." That includes watches, jewelry, wine, as well as American and European art.

WHEN IN DOUBT, IDEALIZE

Kou mostly brushed off questions about how a troubled world economy might affect his business, and said he believed the European economic troubles to be passing squalls. He laid out a very idealistic vision of the bidders at his auction house. "To collect art is not an investment, it is a spiritual enjoyment," he said. "The collectors, they have a feeling." He also noted that China has a large and growing pool of collectors. According to Kou, this diversifies the risk of an art marketcrash. Despite that, he added, "We should be very careful. We have to have a sense of the risk. Art investment is not ever safe."