Zhang Xiaogang's "Forever Lasting Love" (1988) set a new record for a work by a living Chinese artist at Sotheby's Hong Kong in April when it sold for $10 million

It will come as no surprise to learn that the spring auction season in China and Hong Kong, which wrapped up in Beijing earlier this month, was one for the history books. The new buying power of mainland Chinese collectors is the big story, and it seems that not a week goes by without a new artist record or saleroom sensation.

CHRISTIE'S HONG KONG CLAIMED A RECORD...

Christie's clocked up an extraordinary HK$3.65 billion ($469.2 million) in six days of sales in Hong Kong last month, a record not just for the house but for the city-state's auctions generally, breaking the previous Hong Kong record set in April when Sotheby's chalked up HK$3.49 billion ($447 million) in sales. (Whether buyers actually paid for their art is another story.) Both houses' results were way up from last spring's — by 59 percent in Christie's case.

BUT WAS TRUMPED BY BEIJING

Last year the results from Beijing's two leading auction houses Poly and China Guardian easily eclipsed the sales out of Hong Kong. And in spring of 2011, Beijing again asserted its dominance. Poly totted up sales of RMB 6.13 billion (an extraordinary $947.86 million) this season, almost doubling Christie's figure. China Guardian, China's oldest auction house and Poly's main rival, came in second in Beijing but still beat Christie's Hong Kong with sales of RMB 5.323 billion ($823.038 million).

Worldwide, of course, Christie's and Sotheby's still lead the pack. But according to a recently released survey by France's Conseil des Ventes, Poly now commands third place, with Guardian taking number four. Overall, ten Chinese auction houses feature in the international top-20 list.

STILL, HONG KONG HAS A GLOBAL MARKET EDGE IN DIVERSITY, QUALITY, AND REACH

Although Beijing's auction houses win easily in purely monetary terms, Hong Kong still leads in the diversity and quality of lots sold there, as well as in international participation. In areas such as Chinese porcelain and contemporary art, Sotheby's and Christie's put together sales with lots surpassing in quality anything that is yet being consigned in Beijing, while at the same time they stage auctions in areas like fine wines, jewelry, and watches — categories yet to successfully exploited on the mainland. Meanwhile, while the Beijing houses cater to an almost exclusively mainland clientele, Hong Kong acts as the international hub that it has always been. This spring, 50 percent of the successful bidders for Chinese works of art and ceramics at Sotheby's were from outside mainland China, while at Christie's the figure was 60 percent. The ability of the Hong Kong houses to draw international buyers and sellers guarantees them pole position in quality in all sectors other than Chinese traditional modern painting.

HONG KONG AND BEIJING SHARE NEW RECORDS FOR CHINESE PAINTING

The standout results for Chinese painting this spring were claimed by the runners-up in the overall results — Sotheby's in Hong Kong and Guardian in Beijing. Sotheby's generated incredible excitement around its sale of works from the Ullens Collection of Chinese contemporary art back in April. In a flawless sale scattered with new artist records, Zhang Xiaogang's 1988 painting "Forever Lasting Love" sold for a total of $10 million, setting a new record for a living Chinese artist.

China Guardian auctions in Beijing chalked up a record for Chinese painting when Qi Baoshi's "A Long Life, a Peaceful World" (1946) sold for US $ 65 million in May.

Meanwhile, in Beijing, Guardian auctions set a new record for a Chinese painting of any period when Qi Baishi's "A Long Life, a Peaceful World" (1946) sold for RMB 425.5 million ($65 million).

These two sales pointed to two major trends of the season — the continuing strength of the market for Chinese contemporary art and the rise (and rise) of traditional Chinese painting.

CHINESE CONTEMPORARY ART REMAINS A STRONG — AND INTERNATIONAL — MARKET

Chinese contemporary art confirmed its robustness as a market this spring with a range of artist records off the back of lively sales. And while mainland Chinese money pours into a sector that was once the preserve of American and European collectors, international players remain influential. Of the top ten lots in the Ullens sale at Sotheby's, four, including the top lot, went to non-Chinese collectors.

Buyers of all nationalities are far more selective than they were in the boom times of 2007, when almost any aspiring Chinese artist could spark a speculative prairie fire. Today's collectors are looking for established cred, but show increased sophistication by not just plumping for blue-chip names like Zhang Xiaogang, Liu Xiaodong, and Zeng Fanzhi but instead pursuing lesser-known artists of importance in the development of Chinese contemporary art — or by tapping younger and emerging artists with a track record of well-received gallery shows. So record prices were set by contemporary pioneers like Huang Rui, Zhang Peili, and Yu Youhan at the same time important younger practitioners like Li Songsong and Yang Yongliang fetched all-time-high prices.

CHINESE TRADITIONAL PAINTING CONTINUES TO SOAR

International observers tend to be dazzled by the impact of new Chinese collectors on Chinese porcelain and other antiquities, but it is in the market for Chinese traditional modern art that mainland money has had the most transformative effect. Works by Chinese modern artists painting in a traditional style were once traded quietly among anonymous, if passionate, connoisseurs. Now that China's newly rich have focused on art for both its own sake and as a form of investment, the market has skyrocketed.

Qi Baoshi's "A Long Life, a Peaceful World," was acquired in San Francisco six years ago for something less than RMB 20 million (about $3 million) by Chinese collector Liu Yiqian. This May, when a saleroom tussle at Guardian auctions sent the work to its record price, it made for a twentyfold return on Liu's investment.

A stampede for works of this genre has set a slew of artist records and has propelled modern masters like Qi, Zhang Daqian, Fu Baoshi, and Xu Beihong into the ranks of the world's top artists at auction. Last year these four joined the likes of Andy Warhol and Pablo Picasso in Artprice's top-ten ranking of global artists by auction revenue for 2010.

There are now more than a million millionaires in China, and many are drawn to art. Their motivations are as mixed as those of collectors anywhere: some acquire for the love of the work, others for prestige, still others as an investment, and sometimes all three. For anyone seeking to diversify their wealth into portable assets the attraction of art is compelling — and despite high prices, most Chinese believe their modern works are still under-priced.

BUT MAINLAND COLLECTORS STILL KNOW HOW TO SIT ON THEIR HANDS

Chinese collectors have been game-changers in the market for Chinese porcelain, but two high-profile Hong Kong sales this season reminded auction houses of the dangers of misjudging this sector.

This Qing "Golden Pheasant" vase sold privately for HK$200 million ($25.64 million) after being bought in at Sotheby's Hong Kong in April for HK$170 million.

In April Sotheby's auctioned a beautifully selected tranche of objects from the storied Meiyintang collection. As Sotheby's international head of Chinese ceramics Nicolas Chow puts it, "If you asked anyone before that sale how it was going to go, they would have said it was going to go crazy." In the event, bidding was muted and 22 of the 77 lots — including 11 of the premium lots — were bought in.

The problem was that the mainland Chinese collectors sat on their hands. Why? Possibly because Sotheby's had demanded a deposit of HK$8 million ($1.24 million) from bidders on premium lots as a protection against "deadbeat buyers." Or it may have been because the refined collection lacked the showy imperial pieces most beloved of mainland Chinese collectors. For whatever reason, an indefinable element was missing from the saleroom. As Chow explained to ARTINFO China: "We don't rely on the Chinese to buy up all the great things, but we do rely on them to give a certain electricity in the room. The mainland collectors are new, they're energetic, they're fearless, and when you don't have that in the room it impacts the mood. And anyone who has ever been to an auction will tell you, you need great material to make a great auction, but almost as important is the psychological element."

The big winner out of this disappointing sale was the collector (not from mainland China) who called Chow directly after the auction and snared the two top unsold lots at the low estimate.If Christie's was smiling at its rival's misfortune, it wasn't for long. In May they too miscalculated, and their much-anticipated Chinese porcelain and works of art sale went awry. The top lot was a Qianlong-era "revolving vase" with a similar level of artistry to the Qianlong vase that sold at Bainbridge's last November for a spectacular, world-beating $85.9 million. Understandably, Christie's felt confident in setting a reserve of HK$200 million ($25.7 million). On auction day, the vase was passed in.

Christie's Hong Kong's head of Chinese ceramics Pola Antebi reflected on what went wrong: "After seeing a number of lots sold in the tens of millions of dollars for the first time [in the fall and also in New York], the expectations for these very rare and very important pieces that we did offer were the same and maybe in hindsight that wasn't the best place to start." Put simply, when faced with high estimates the buyers balked. "There was interest," says Antebi, "but the estimates — the starting points — were a little too high, and that put people off."

Despite the disappointments of spring, neither Chow nor Antebi are anything but bullish about the future of their sector. Chow notes that the entry of mainland Chinese collectors has "reinvigorated the interest of Western, Taiwan, and Hong Kong collectors. People want to buy in a market that's exciting." Antebi meanwhile looks to the mainland. "We are at the start of a huge upward curve," he said. "The Chinese have only really been in the market for the last ten years, and I fully anticipate in the next ten or 15 years that the number of people who are active in this market will continue to grow. Many of our mainland clients are very optimistic about this field and feel very strongly that it is going to continue to grow as the wealth in China continues to grow."

Betting on a market that the Chinese collectors themselves believe in looks like the safest wager of all.