Tax is the Main Obstacle to Reclaiming Chinese Cultural Relics

A German auction company exhibited a rare Ming Dynasty (1368-1644) gilded statue of Bodhisattva to be auctioned in Beijing. [Photo/ Wenweipo.com]

At least 10 million Chinese artifacts are scattered overseas. Yet a tax on reclaimed items remains the biggest obstacle separating China's domestic market from antiques lost overseas.

Cultural relics reclamation has been a focus of concern in the Chinese art market in recent years. In the domestic art auction market, more than 60 percent of the auction items are reclaimed cultural relics. Meanwhile, Chinese collectors and some private entrepreneurs are digging deeply into their pockets to buy cultural relics from abroad.

More than 100,000 Chinese artifacts were successfully reclaimed since 1992, including around 30 collection highlights in the National Museum, according to Ou Shuying, deputy secretary-general of the China Association of Auctioneers. But since 2011, those bringing artwork into China through the Custom's office are required to pay a 30 percent tax on the value of the artwork, making the procedure less attractive.

"Collectors in the country as well as auction companies abroad don't accept such a high cost. In that case, tax is the biggest barrier for us obviously," Ou said in a recent interview.

Some auction companies tried to trade or auction in the tax-free zone in China. But according to Gan Xuejun, head of the China Association of Auctioneers, artifacts can be kept in the tax-free zone for six months at most, with a cash deposit.

"Even if the artifacts can enter the country through free trade zones, it cannot be considered a real sense of going home," Gan said.

Xu Chen, director of the Public Economy Department at the University Of International Business and Economics (UIBE), also pointed out that how to trade and display the reclaimed cultural relics in the domestic market, instead of in the Bonded Area, is a very difficult problem. Right now, many collectors prefer to keep their artifacts brought from other countries in Hong Kong to avoid the tax.

The Chinese auction market also lacks mature control, while artifact insurance system is far from perfect. All these contribute to the difficulty in reclaiming cultural relics.

"The outlook of China's domestic antique market remains murky. It remains unclear whether antique holders are willing to sell; and if they are, whether they can obtain rewarding prices. What's more, a lack of regulation in the Chinese antique market compared to overseas markets could also hurt seller confidence," Ou added.

To solve these problems, China established in early July a special platform to facilitate the reclaiming and trade of cultural relics lost overseas..

The new platform, established at the National Base for International Cultural Trade, will leverage the base's preferential policies to display and trade cultural relics and provide services that include relic identification, preservation, storage and delivery. Chinese museums, state-owned antique shops and private collectors can use the platform to purchase or retrieve lost cultural relics based overseas.