China's art market saw record sales of works valued at 100 million yuan, but auctions continue to be hampered by bidders who fail to pay up in full, Deng Zhangyu reports.

This past year witnessed a steady increase in sales for the Chinese auction market, with the global sales volumes of art and antiques hitting $7.1 billion. However, the problem that has long plagued the market still exists: less than half of the lots sold were actually paid for by bidders.

According to the Global Chinese Art Auction Market Report 2017 issued on Thursday at an art forum held at the Shanghai Free Trade Zone, global auction sales of Chinese art and antiques rose by 7 percent, with 38 individual sales of works valued at more than 100 million yuan ($14.2m)-a new industry record. In 2011, when the Chinese art market reached its peak, the number of artworks sold valued at 100 million yuan or over stood at just 11.

The report was compiled by the China Association of Auctioneers, which assembles data for China's domestic market and Artnet, an online source for information on the art world.

Zhang Ran, director of Artnet China, says that the strong demand for high-end artworks with an established provenance is being driven by the burgeoning number of private museums ever more hungry to acquire blockbuster works to enhance their collections.

The most expensive lot last year was master painter Qi Baishi's set of ink panels Twelve Landscape Screens auctioned at the Poly Auction Beijing's fall sale, which fetched 931.5 million yuan and set another record for the Chinese art market. It was the first time that a Chinese artist broke into the $100 million club, joining the ranks of Western masters such as Pablo Picasso, Amedeo Modigliani, Francis Bacon and Edvard Munch.

According to Zhang, all the buyers bidding for Qi's work came from private museums in China.

Last year alone, more than 10 private museums opened to the public, mainly in Shanghai and Beijing. The bulk of their owners are entrepreneurs, such as Chinese movie mogul Wang Zhongjun, who set up the Song Art Museum in Beijing to display his collection of works by artists such as Picasso and Vincent van Gogh.

Although blockbuster works at auction last year were embraced by buyers, their willingness to pay for them after placing a successful bid lacked as much passion. As of May, only two pieces of the 18 artworks sold on the Chinese mainland for more than 100 million yuan have been paid for in full.

According to the report, of all the lots sold in 2017, the percentage of the total payment received as of May stood at just 49 percent, the lowest figure since 2011.

Li Xiaojie, a former deputy minister at the Ministry of Culture and Tourism, pointed out at the Shanghai forum that the problem of nonpayment and fake bidding has persisted in China's art market for some time. He appealed for etorts from the art industry to find a solution to the problem that has continued to plague the market and block its development.

He also said that the environment in the art market as a whole has been improving steadily, especially in terms of policy. For example, tarrifs imposed on artworks and antiques sales have dropped sharply over the years. As of the end of May, the tax rate levied on art fell to 1 percent from the 12 percent imposed just a few years ago.

Apart from improvement in taxes, the world's biggest bonded art warehouse is due for completion in the fourth quarter of the year in the Shanghai Free Trade Zone, according to its general manager Hu Huanzhong. The six-floored warehouse, which was developed with the Ministry of Public Security, aims to provide a comprehensive storage space for the China art market.

Contact the writer at [email protected]