Global auction house Sotheby's said Friday it's setting up a Chinese joint venture that will allow it to become the first foreign company to hold art sales in the world's biggest fine art market.
The company said it signed a deal to set up Sotheby's (Beijing) Auction Co. with Beijing GeHua Art Co., a Chinese state owned company. Sotheby's will own 80 percent of the venture, which still needs Chinese government approval.
The venture marks a major expansion into China for Sotheby's. The company and rivals such as Christie's hold regular auctions in Hong Kong attracting many mainland Chinese buyers but have been blocked from doing the same on the mainland.
Christie's licensed its name to China's Forever International Auction Co. in 2005. But Sotheby's new venture, which gives it majority control and responsibility for day-to-day operations and management, will allow it to leap ahead of its perennial rival.
The new venture will focus on auctions and selling exhibitions of "non-cultural relics" such as contemporary art, wine, watches and jewelry. It will also have access to a "free port" project that GeHua is developing in Beijing. Free ports are tax-exempt secure storage facilities used to house art and other valuables.
The first auction will be held on Sept. 27 at a Beijing museum where a single sculpture, by Chinese artist Wang Huaiqing, will go on the block.
China was the world's biggest fine art market in 2011 for the second year in a row, accounting for 41 percent of global sales of paintings, sculptures, installations, photography and drawings worth $4.8 billion, according to market information provider Artprice.