Chinese Coins: Both Sides Now
Posted on 1/22/2019
“In China, once upon a time, there was a rich man who owned a crazy great…”
My friend paused, “Wait, let’s back up a little. In China, once upon a time, there was a rich man who wanted to own a crazy great coin collection. He was not actually a coin guy himself, so he asked a coin dealer to help him. ‘I have a little job for you,’ said the rich man. The little job was to form a new collection, an amazing collection, a crazy great collection. The dealer was given a budget and told that he would receive a percentage for each coin acquired.”
“The dealer must have thought this was too good to be true, but what if this patron was crazy himself? He might change his mind. Speed was of the essence, the funds must be used up ASAP. First the dealer pillaged his own city’s coin market, but that only put a dent in the account. Next, he traveled to another city famous for its auctions. In one sale after another, he bid and bid and bid some more. He bought coins, he bought paper money, he bought sycees (ingots), he bought high grades, low grades, sliders, everything. He spent so much that the entire market bulged. Some coins sold for prices that would never be seen again.”
The rich man took his new collection and created a private museum. My friend showed me this museum one day and it was quite beautiful and well-organized. But, when I looked for it a year later, it was gone.
Besides private coin museums (a big one just opened in Nanjing in December), what differences are there between the Chinese and American sides of the coin business? One is where coins are sold: China has coin marketplaces, the USA prefers individual stores. For instance, while Shanghai has some freestanding coin stores, many in its dealer community, maybe most, are clustered into two locations: Lu Gong Coin Market and Yun Zhou Antique Market.
In Beijing, there is the huge Madian Coin and Stamp Market. Guangzhou has a large coin market. Smaller cities like Xi’an and Shenyang also have them. Coin dealers in the USA almost uniformly have standalone stores that are located some distance from any competitors. The stores essentially stake out territories.
|Panda America office in California, Yun Zhou Antique and coin market in Shanghai and Madian
One benefit of placing so many coin stores near to one another in China is that information flows quickly between dealers. It is not easy to keep a secret when you are surrounded by your competitors. This is also a convenient arrangement for the public. In the USA, it is only at coin shows that there are concentrations of dealers. Even then, dealers may not know who is in the adjacent booth. Socializing and shop talk take place at sponsored events, dinners and informal gatherings.
The USA’s largest coin show is the ANA’s national convention, or World's Fair of Money (the next one is August 13-17, 2019 in Rosemont, Illinois). This show features educational exhibits created by collectors along with booths from mints of the world. It is, though, primarily a retail show.
The largest coin show in China is the Beijing International Coin Exposition (BICE) each November. The exhibits here are often massive. Foreign mints, Chinese banks and numismatically connected branches of the government all participate. There is retail business done at the show, but mostly it is a showcase for China’s numismatic culture.
In the digital numismatic world, the biggest player in American ecommerce is eBay. It has the greatest volume and reach, but it is not the entire story. Companies like Stack’s Bowers, Heritage, Stephen Album Rare Coins and Great Collections, to name a few, regularly conduct online sales and auctions.
Among dealers, there is a private Facebook group called Coin Dealers Helping Coin Dealers that is rapidly expanding in all sorts of directions. Even rather large-ticket items trade hands there.
The real digital divide between the countries, though, is China’s embrace of mobile-based commerce. In China, e-commerce for 2018 is estimated at 28.6% of its total retail sales. Mobile makes up 75% of that, or maybe even more. People tell me that mobile pay is used for 90% of retail sales in China. The People’s Bank of China requires businesses to accept cash; otherwise, most would probably refuse. Cash is truly trash. So, it is not surprising to find Chinese numismatists buying, trading and talking coins on mobile platforms.
In the third quarter of 2018, e-commerce sales accounted for 13.5% of all USA retail sales, with mobile capturing about a third of that, or 4.5%.
With so much of its coin commerce connected by ever-present mobile phones, the pace of change in China is quite fast. It always astonishes me when I get notices from multiple sources within seconds of a numismatic news development.
Yet, for all this hyperdriven speed of information exchange, China also very strongly embraces one of mankind’s oldest forms for sharing knowledge: books. It has been my observation that books are far more central to Chinese coin culture than they are to American collectors. In the USA, there are standard catalogs that are popular (the "Red Book," for example) and many wonderful works that serious collectors cherish. Nonetheless, it can be a hard sell to convince many American coin collectors that they really need to buy the book before the coin.
In China, books are at the center of numismatic culture and even beginning collectors know that they must study to be respected and successful. This emphasis on the written word contributes to an amazingly large stream of new publications in Chinese.
The Chinese and American coin markets each have their own idiosyncrasies and intricacies, but they both offer opportunities to learn, enjoy and profit from numismatics. Speaking of profit, that private museum may not have been such a bad deal after all for its owner. In the years since the collection was put together, many market areas that it covers have gone up quite a bit in value. The coin dealer was happy, too. He bought himself a stretch limo Hummer. Crazy.
Peter Anthony is an expert on Chinese modern coins with a particular focus on Panda coins. He is an analyst for the NGC Chinese Modern Coin Price Guide as well as a consultant on Chinese modern coins.