Silence fell on a Hong Kong auction room when bidding on a painting by Chinese contemporary artist Zhang Xiaogang reached HK$7 million ($903,200) on Oct. 6. At the market’s peak in May 2008, buyers offered up to 10 times more than that for the top lot.

Zhang’s 2005 diptych “Comrade” -- gray oil portraits of an unsmiling, Mao-styled couple on 130 centimeter-by-110 centimeter canvases -- eventually fetched HK$8.5 million ($1.1 million), the most expensive lot at Sotheby’s sale. In May 2008, the last major Hong Kong auction before the Lehman Brothers Holdings Inc. collapse, a painting of red guards by Zeng Fanzhi set an Asia contemporary art record of HK$75.4 million.

“This auction shows Asia contemporary art prices are a long way off from a full recovery,” said Jeffrey Yu, a Taipei- based art dealer, in an interview at the sale. “Chinese contemporary-art prices will keep struggling for a while. Prices are just beginning their slow climb from the bottom.”

Yesterday’s results suggest Asia’s buyers still prefer old paintings by established artists over contemporary works. In unsettled economic times, speculation recedes and buyers choose antiques because they are seen as better investments, dealers say. Contemporary paintings, especially by productive artists, might drop in price as they make more works.

At yesterday’s auction of older Asian paintings, an oil-on- board painting, “Lotus et Poissons Rouges” (“Lotus and Red Fish”) by deceased Chinese master Sanyu, fetched HK$36.5 million. An oil-on-canvas work, “7.4.61,” by Chinese abstract artist Zao Wou-ki (born 1921) made HK$15.8 million, against a presale top estimate of HK$12 million.

‘Bargain’ Masters

“These prices are considered cheap for Chinese masters like Sanyu and Zao,” said Shanghai-based gallery-owner Hua Yuzhou, who paid HK$2.4 million for an oil-on-canvas by Wu Dayu (1903-1988). “Give it a few months and these pieces may run beyond our reach again.”

Eric Huang, 28, a Taiwanese art dealer who bought the Zao painting, said contemporary works don’t have the artistic merits of older artists such as Zao. He called his purchase a bargain.

Preference for old works extended to Southeast Asian art, an auction stronghold for contemporary artists like I Nyoman Masriadi (born 1973) for the past two years. That changed yesterday. The strongest bids went to a 122-centimeter-by-240 centimeter oil-on-board, “Magnificent Horses” by Indonesian painter Lee Man Fong (1913-1988), setting an artist record of HK$8.2 million, three times the top estimate. Masriadi’s “The Man From Bantul ‘The Monster’” fetched HK$2.3 million.

‘Money Net’

Several pieces tipped to do well at the contemporary-art auction didn’t sell. Bidders passed on Cai Guoqiang’s 4 meter- by-6 meter gunpowder-and-ink work “Money Net No. 3,” with a HK$5.5 million top estimate, and Zeng Fanzhi’s 2004 “Untitled,” which was expected to reach HK$3.5 million.

There were lots that beat expectations. A 2005 painting, “Hats Series -- The Lovers,” by Yue Minjun, whose pictures of pink-skinned men with outsized grins have become synonymous with Chinese contemporary art, fetched HK$6.4 million, against a presale estimate of HK$3.5 million. A Chinese calligraphy piece, whose characters resemble spiders, by deceased Hong Kong artist Tsang Tsou Choi (known as King of Kowloon) fetched HK$500,000 against a top estimate of HK$70,000. Estimates don’t include commission.

Of the 194 contemporary pieces offered, 150 sold, netting a combined HK$116 million. With two days left, Sotheby’s auction has tallied HK$519 million, according to spokeswoman Rhonda Yung. Sotheby’s expects the sale to reach HK$780 million.

Chinese Dominance

The dominance of mainland Chinese buying is more visible at this Sotheby’s auction than in previous art sales, accounting for the top lots in every major category.

Over the weekend, a Chinese buyer paid a record $94,000 for a 6-liter bottle of Chateau Petrus 1982. Another spent HK$7.3 million for a 1984 oil-and-color on paper by Li Keran at yesterday’s sale of classical Chinese paintings. The Zhang piece also went to a mainlander.

Chinese buying may help Hong Kong surpass New York and London this year as Sotheby’s biggest wine market, said Yung. To date, the company’s Hong Kong wine sales have totaled $14.3 million, compared with New York’s $10.5 million and London’s $8 million. More auctions are coming up in the latter two.

The auction continues today for gems and watches.

Sotheby’s buyers’ commission is 25 percent of the hammer price for the first HK$400,000; 20 percent for an amount between HK$400,001 and HK$8 million; and 12 percent for any amount above that.