Western auction houses have been making a killing off China. Within the last two years, Chinese artists have become fixtures of the New York and London contemporary-art sales. In 2003, Hong Kong overtook Paris to become the world's third-largest auction market, behind London and New York. And despite fears of a crash, that market is still growing: In spring, Sotheby's series of Hong Kong sales achieved $227.5 million, its highest total ever for the region, while Christie's took in $310.7 million—a 58 percent increase over the same series in 2007.

It's little surprise that American galleries want to claim a piece of the pie—and the arrival of two major New York galleries in mainland China this summer suggests the next phase for the country's integration into the global art scene.

On July 10, Chelsea's James Cohan Gallery opened a boutique-like space in an Art Deco villa in Shanghai. Mega-gallery PaceWildenstein, which has several New York locations, opens its first foreign outpost on August 3, in a massive factory in China's cultural center, Beijing.

Arne Glimcher, who founded Pace in 1960, says that it was China's burgeoning contemporary-art scene that got him. "It's the most exciting artistic development I've seen since the 1960s. This is a real shot in the arm for me."

In the past decade or so, China—especially Beijing—has seen a number of foreign galleries establish footholds. "The business has become totally internationalized," says Meg Maggio of Pékin Fine Arts, who founded her first Beijing gallery in 1996. First the city had an influx of galleries from other parts of Asia. Then came the Europeans, like Italy's Galleria Continua, which opened in 2005, and Denmark's Galleri Faurschou, which launched with a Robert Rauschenberg show last fall. More recently, a few New Yorkers have founded spaces, including Christophe Mao, whose Chambers Fine Art specializes in contemporary Chinese art, and Jack Tilton, who in 2007 opened an artist's residency nearby.  

Compared with New York, Tilton says, China is a remarkably inexpensive place to do business. "Building a building is, like, $40,000 to $60,000," he says, "so you can build something enormous for no money." He has put up three buildings so far, with an eye to selling them some years down the road.  

Pace and Cohan have invested considerably in their new projects—yet with strikingly different approaches. Pace's strategy is to go after the artists by becoming the first truly major player in Beijing. Cohan is aiming straight for collectors: By setting up shop in Shanghai's relatively small gallery-land, they hope to find new buyers among the world's super-rich, whether they live there or are just passing through.