Invest in or collect Chinese Stamps-PRC

Chinese stamps have been hot since early 2007. Looking back, there was a price bubble in 1990s like the one in 1970s in the USA. The bubble busted and the stamp prices had been on the declinesince 1998. Due to the rapid recovery in 2007, most of the better stamps have regained or even surpassed the peak price achieved in 1997. So what's the future?
First of all, we need to understand what stamps are good investment. Stamp price is driven by three factors: scarce, design and demand. You haveno control or influence on the demand, but you can have a reasonable estimate of the scarce, and evaluate the design merit.
People's Republic of China('PRC') was founded on October 1, 1949. The central government started to issue stamps as well as centralized this function around that time. The offical central government issued stamps are listed in Scott Catelogue Volumne C-F. These are so called Unified PRC stamps in philatelic terms. At the back of listings(Back of the book, or BoB), there are stamps issued by the variouslocal governments. These are so called Liberated Area stamps in philatelic terms. Scott is good enough for Unified issues and is just a reference for Liberated issues. In addition to Scott, Chinese government publishes and updates almost annuallyan official catelogue for all the Unified issues, a governmental series number is given to each set and no Scott number is displayed therein. Therefore it is up to you to corelate the two coding systems. In Hong Kong, Yang also publishes the popular Yang's catelogue, it uses the governmental series to identify each issue and shows the price for the FDCs. Scott hasbetter price information for each stamp, butlittle price for specialized materials and just one or two pictures for each issue,whereas the government book shows pictures for ALL the stamps and pertinent information for each issue, such as designer, engraver, and printers, etc. Yang's issomewhere in between. In this guide, i will use Scott number to identify stamps unless specified otherwise.
In order to get the most accurate retailprice information, you need to get the monthly stamp trading journal published by thetraders in Beijing. Generally you can buy stamps on okay for lower price than the retail, but make sure you buy from the reputable seller because you cannot check the stamps as you can in the stamp shops or shows. In terms of the market efficiency, the stamps trading is on par with the OTC stock market in the US. For theexceptionally valuable stamps, auction realized price seem the only source to get the market value.
So what PRC stamps are good investment? the answer is more straight forward than invest in US stamps, forthree reasons. #One is that the grading does not affect much on the price. #Two is that there are much less varieties in PRC issues, especially nogum, tag, and coil stamps varieties at all. Perforation varieties that result in largeprice difference only exist intwo issues, and it is very easy to distinguish. #Three is that the errors or oddies are kept to the minimum, you do not need anything beyond the standard Scott to know 99% of them. I have to say the government didthe bestjob in the worldto ensure the purety of philatelic materials for such a massive country. Having said all that, there is one thing to watch out, that is the reprint for very first16 issues by PRC.Fortunately most of originals are easy to distinguish from the reprint.
Talking of the key PRC stamps, we have tounderstandthat certain wel-known rarities are beyond the reach of most collectors, so let's exclude these first. For your reference, thesuper rareties are as follows, please note the price varies significantly, depending on the conditions of the stamps:
a. Sc194/7v, the unissued version, please refer to the notes in Scott, just that the price for the mint set would be well over $12,000 and is very hard to gee by even in auctions by auction houses.
b. Sc292v, the unissued version, mentioned in the notes in Scott, price for mintis well over $60,000. Extremely hard to find in any auctions.
c. Sc370/1v, the unissued version, mentioned in the notes in Scott, mint set price well over $50,000. 371v(22f) is the key, account for 95% of the price, give or take. Very hard to gee by in auctions.
d. Sc999a, the famed Whole Country is Red, mentioned in Scott. Mint VF copy fetches well over $30,000.
e. Several unissued stamps in the Culture Revelution period, cost well over $50,000 each, to be conservative.
For investment purpose, you can ingore any issues after 1985, to make the matter simple. Remember the cut off year for many other Asian countries could be as early as 1960.
Different than other countries, the merit of the better PRC issues lies in the artistic creativity, or even more so, the genuine passion and love in the socialist ideology in 1950s through 1970s. These are reflected in the design of stamps, by either engraving or later the photogravure. In terms of the scarcety, many betterissues are issued in large numbers, but are consumed in the mail process. So the existing mint very fine copiesbegee very scarce. These scarcestamps can be the high valueor the low value in the set, depending onthe situation.Given the nature of the PRC stamps circulation and consumption, the issue that include many values tend to appreciate the best in the past. You may consider the following issues for long term investment:
1. Sc65-71, Gate of Heavenly Peace, third issue, key value is the low value of Old Yuan 200, color is green. Need to ensure the centering is good and no hinge. Mutiples cound be found with the right dealer.
2. Sc95-94, Gate of Heavenly Peace,fourth issue, key value is the thirdhigh value of Old Yuan 2,000, color is olive. Need to ensure the centering is good and no hinge. Mutiples cound be found with the right dealer.
3. Sc95-100, Gate of Heavenly Peace,famed fifth issue, key valuesare thehigh value of Old Yuan 100,000 and 200,000, color is olive. Need to ensure the centering is good and no hinge. Only block of four appeared in recent auctions.
(To be continued)