Chinese art market soul-searches as prices plummet
HONG KONG: The fallow plots of farmland on the edge of the artists’ village of Songzhuang are a symbol of Chinese contemporary art’s recent boom and bust cycle, Reuters reported.
When prices for Chinese art soared, there were grand plans to build more galleries and studios in this artists’ hamlet near Beijing. Yet today, after art prices plunged by some 60 per cent in the past year, the expansion plans have floundered.
After a white-hot stint, the financial crisis has battered China’s art landscape, shrinking investment in grand schemes like Songzhuang, shuttering galleries in Beijing’s pioneering 798 arts district and deflating bloated egos, valuations and excesses.
‘The Chinese contemporary market was over-swollen before. I felt it wasn’t very healthy,’ said Nan Xi, a former Chinese army officer turned artist whose works, huge pointillist ink-brush canvasses which he displays in his spacious Songzhuang villa, fetched around half a million yuan at the peak of the market.
In the good days, ferocious bidding in auction rooms at the market’s peak in 2007 and 2008 caused prices to spiral skyward with buyers and speculators treating contemporary artwork almost like stocks or tradeable commodities.
What resulted was a glut of average art at inflated prices and a growing community of millionaire artists, some more drawn by the opportunities to make vast amounts of cash than any artistic vision.
‘The financial crisis has been a good lesson for us; to better know what the market is, and art’s relationship to it. Having too much money is not good for an artist’s development,’ said Nan Xi.
China’s leading auction house, Beijing Poly International Auction, which is famous for its repatriation of looted bronze animal heads from the West, has seen business in Chinese contemporary art plunge over 50 per cent in the past year.
‘A lot of buyers have been pushed out, including the speculators. The collectors who are left are now able to pay more reasonable money for reasonable things,’ said Li Da, Poly’s general manager.
Li gives the example of a large Zhang Xiaogang bloodline painting which fetched 16.8 million yuan in May and says that painting would have sold for more than twice that amount if it had been auctioned in 2007.
Melancholy canvasses by Zhang, one of China’s A-list artists which includes the likes of Liu Xiaodong, Zeng Fanzhi, Fang Lijun, Cao Guoqiang and Yue Minjun, sold at up to $6 million a piece at the market peak.
Those valuations have, like many others, since fallen some 66 per cent according to an index on Chinese art website Artron.net.
Since 2007, the overall market for Chinese contemporary art has shrunk over 54 per cent according to Artron.
Sotheby’s and Christie’s, which both pared back their sales of Chinese contemporary art in Hong Kong, have struggled to consign outstanding works, with sellers still wary of fragile sentiment.
At Sotheby’s autumn sales, bidding was mixed for contemporary art with Zhang Xiaogang’s ‘Comrade’ one of few pieces testing the one million dollar mark.
Without an across-the-board recovery in China’s economy and a return to the days of huge wealth creation, Li said she doesn’t see a comeback in Chinese contemporary art prices anytime soon.
‘Right now, the market is still consolidating,’ said Tim Lin, a veteran Taiwanese gallery owner at the recent Sotheby’s autumn sales in Hong Kong that are considered a barometer of the market.
‘The market will go up, but you can’t just focus on the short term. See it like a flower, if it blooms too quickly, it will wither quickly. You need to look at the long term.’
Auctioneers and dealers say collectors have become more selective since the crash, spurning lesser works while seeking value in younger artists beyond China in Asia and in the West.
‘Through this consolidation, there will be better discernment of good artists and good works and their inherent value’ said Li of the Poly Group. ‘The true connoisseurs of Chinese contemporary art, the collectors are left … and they will be able to pay reasonable money for reasonable things.’
Misung Shim, the head of Seoul Auction, which sold a large work of British artist Damien Hirst in Hong Kong this month for $2.2 million, an auction record for the artist in Asia, sees growing opportunities beyond China’s art scene.
‘We are trying to open the Western art market in Hong Kong rather than the Chinese paintings market,’ she said.
‘Antiques Fashionable Again’
Over the past three decades, Chinese contemporary art has writhed out of the wilderness of Chairman Mao Zedong’s Cultural Revolution purges and upheavals like the Tiananmen Square crackdown in 1989, later piggy-backing on China’s economic and political rise, to catch the eye of the global art community.
While plunging prices of avant-garde art worldwide represents big potential upside, major art investors such as Philip Hoffman of the Fine Art Fund in London are putting their money more in conservative, safer bets.