Said Jeffrey Schneider, a British Philatelic Association member whose company is organizing a Jan. 31 auction of Hong Kong stamps.

There was another problem: Taiwan was colored white.

The island was the bastion of Kuomintang troops that were defeated by their Communist rivals on the mainland in 1949. Kuomintang under Chiang Kai-shek had seized control of Taiwan and claimed to be the legitimate government even of the mainland. Today, China still considers Taiwan a breakaway province that must be recaptured, even if by force.

“There’s so much history and political meaning in these stamps,” said Schneider, of Interasia Auctions Ltd. Chinese stamp collectors are bigger history buffs than their counterparts elsewhere, he said.

China’s first stamp was issued in Shanghai in 1878 while the port city was controlled by foreign colonizers following the Opium War. Before that, payment for delivery of letters and parcels was handed to a courier. In 1897, a national postal system was set up by the ruling Qing Dynasty. The U.K. produced the world’s first postage stamp -- the Penny Black --in 1840.

Some of “Whole Country Is Red” had been sold before the pull order came. At the Hong Kong sale, a pair, 30 millimeters- by-40-millimeters with a face value of 8 cents each, may fetch HK$2.2 million ($283,000), said Interasia. The lot is among 1,800 items at the biggest public sale of Chinese stamps that’s expected to fetch more than HK$45 million.

‘Big Blue Sky’

Among the most-expensive stamps at the auction will be those that were unissued, yanked, or flawed at production. That’s because they’re rare, said Schneider in an interview. One such rarity is an unissued 1967 stamp, dubbed “Big Blue Sky,” which marked the 40th anniversary of Mao Zedong’s decision to join forces with his erstwhile rival Zhu De at the southeastern city of Nanchang, an alliance that led to the Communists’ eventual victory.

The stamp on offer is missing the half that features Mao. Yet it may fetch HK$800,000 at the auction because it’s considered in collecting circles as the most representative of the decade-long Cultural Revolution, according to Interasia.

Rewarding Mistakes

“Only in stamp collecting are mistakes such as printing errors worth more than getting it right,” said Schneider.

The most-expensive stamp ever auctioned was an 1855 Swedish three-skilling postage that was mistakenly printed in yellow rather than green; called the “Tre Skilling Banco Yellow,” it fetched $2.3 million at a Swiss sale in 1996. In 2007, a 1918 upside-down version of the U.S.’s first airmail stamp with a face value of 24 cents, dubbed “The Inverted Jenny,” sold for $977,500 at a U.S. auction. The error-free version would cost no more than $500, said Schneider.

In 2007, a 1941 stamp with an inverted image of the founder of modern China, Sun Yat-sen, sold for about HK$900,000 in Hong Kong; the correct one would have fetched HK$10, Schneider said.

Provenance also affects prices. The stamp with the highest presale estimate of HK$3 million at the coming Hong Kong auction is an 1897, one-dollar postage issued during the Qing Dynasty, that comes with details of all its 26 previous owners, according to Schneider.

Rising Prices

Anecdotal evidence suggests prices of rare Chinese stamps are rising as the nation’s economy grows, he said. A 1962 souvenir sheet featuring the Chinese opera singer Mei Lan Fang that sold for just HK$13,800 in 2002 was auctioned for HK$74,750 in November, he said.

“If China-linked asset prices, such as art, have risen so much in recent years, one can reasonably expect the same of stamps,” said Schneider.

Source: China Stamp With Map of Dropped Taiwan May Sell for $283,000 

To contact the reporter on the story: Le-Min Lim in Hong Kong at lmlim@bloomberg.net

Last Updated: January 28, 2010 11:00 EST