Conflicting views about Chinese impact on art market

CHINA ART MARKET TRENDS ART COLLECTORS

A recent article published on English.news.cn by the Xinhua News Agency has highlighted the emergence of Chinese mainland buyers of high-priced modern and contemporary Western art.

The article reports that top art dealers and auctioneers in the West have seen their high profile works go to mainland collectors, many of whom are newly rich entrepreneurs. A number of these art professionals believe China has the potential to become a huge market for Western art.

Pablo Picasso's Nude, Green Leaves and Bust (1932) was recently sold at a Christie's sale in New York for a record $106.4 million. It is believed to have been purchased by a Chinese collector.

“I think the potential for Western art in China is huge, just massive. There have been a very few people buying impressionist modern paintings since 2004 and 2005 but suddenly, since last year, there has been almost a surge.” Ken Yeh, chairman of Christie’s Asia in Hong Kong (as quoted on English.new.cn)

“Mei Jianping, professor of finance at the Cheung Kong Graduate School of Business, Beijing… believes what is happing is similar to the Japanese art spending spree in the late 1980s, which saw the impressionist art index increase by more than 200 percent.” English.new.cn

“To capture this interest in art,” the article mentions, “China may actually be getting its own first traded art fund. The Shenzhen Culture Equity Exchange is later this year expected to launch one. It will be open to investors who want an alternative to investing in individual works of art.” Many believe these new Chinese buyers are making “sensible investment decisions and not bumping up prices by paying silly money.”

“They are buying art because they like it but also for investment. If they spend $1m, $2m or $10m for a painting they want to make sure they will get a return five, six, seven years down the road.” Ken Yeh, Christie’s (as quoted on English.new.cn)

Of course, as the article relates, there are some art professionals that believe this trend is pure hype.

“I think there may actually be more of a market right now for major works in the Flemish part of Belgium than in the whole of China. I think mainland buying of significant Western art is a long way off.” Ben Brown, owner of Ben Brown Fine Arts (as quoted on English.new.cn)

Brown believes that this trend will only benefit auction houses where prices for high profile art are being pushed up by Chinese underbidders.

Read the full article here.

KN

Related Topics: collectors, business of art, market watch

Related Posts:

• Asia Art Forum 2010 meets growing demand for art collector education in China – Jing Daily – May 2010
• The Power 100: curators up and artists down on ArtReview’s annual list – December 2009
• Contemporary art market in Asia now bigger than US for first time says Artprice – November 2009
• Art loans can offer liquidity to your collection – November 2009
• Mei Moses art index founder plans Chinese version, optimistic about Chinese art – March 2009

Subscribe to Art Radar Asia to follow for more on Chinese collectors

Colin Chinnery, director of ShContemporary, on future of Shanghai Art Fair – interview Artron

SHANGHAI ART FAIR INTERVIEW

Colin Chinnery was in a precarious position as the new direction of ShContemporary, the Shanghai art fair, in 2009. The young art fair, having its 3rd incarnation in 2010, faced an uncertain future last year while the financial world dealt with the possibility of economic collapse. However, the anxiety leading up to the event was unfounded, as ShContemporary attracted over 30,000 visitors and decent sales. Colin Chinnery talks with Artron.net about the challenges of leading an art fair within such adverse economic circumstances, his plans for ShContemporary 2010, and Chinese art collectors.

Colin Chinnery, director of ShContemporary

The initial panic regarding the contemporary art market that followed the economic crisis of 2008 seems to have subsided. As you begin working on ShContemporary for 2010, do you feel an increased optimism?

The panic was understandable when the economy seemed to be in free fall, especially when there was a clear analogy (and connection) between the phantom wealth conjured by Wall Street and easy money bloating the art market. Everyone knew that something like this was around the corner, and when we finally hit that corner we had no choice but to do the necessary work in order to readjust. With ShContemporary, we have perhaps turned another corner. The 2009 edition saw a lot of optimism return to the market, and that makes life easier for 2010. The playing field is different because the number of players in the art market increased exponentially during the boom years, and now there are more mouths to feed, so to speak. As an art fair whose job is to fulfill these increased expectations, we have to prove ourselves every year, not just for one year. I don’t think the pressure will relent for many years to come, and that is a good thing. It keeps people at the top of their game.

The contemporary Chinese art market has experienced a significant downturn. How does this lack of confidence in contemporary Chinese art impact the fair?

ShContemporary includes art from all over Asia and beyond, so the slowdown in demand for certain Chinese artists’ works didn’t affect us at all. Certain galleries are very sensitive to the current demand, and bring the right works. Sales were good among Chinese galleries this year at ShContemporary. Those who visited the fair will have noticed that there were very few works by top-priced Chinese artists; the prices and the kind of work on offer represented a change in attitude. Now that the market is shifting [its] attitude, I think it’s an opportunity for different voices to be heard, which was very evident at the fair.

Given ShContemporary’s location and history, how much of next year’s edition do you expect will be focused on Asia, as opposed to having a more global perspective?

The fair as a whole does have a regional focus on Asia, and that is reflected in the participating galleries and the kinds of work being shown and sold; in 2010 it will have an Asia Pacific perspective whilst presenting work from Europe, the U.S., and other regions. The market should always help to mix up the regional DNA as much as possible. How much that is possible will increase each year.

How would you position ShContemporary in relation to the other fairs in China, including Art Hong Kong (ART HK)? What makes ShContemporary unique for dealers and collectors?

We want to create a fair that is thinking about the future in all kinds of ways, from artistic values to the structure of the market. I feel that can be reflected by the two new initiatives that were launched this year. On the artistic side there is the Discoveries section, a thematic exhibition and lecture series dealing with the topic, “What is contemporary art?” Instead of being a special section a side attraction peripheral to the fair, it became a central feature. It also deliberately included challenging work not necessarily suitable for the market, but necessary for the exhibition to make sense thematically. The exhibition dealt with issues relating to the term “contemporary” from different perspectives, ranging from pioneers such as Joseph Kosuth, Martha Rosler, and Marina Abramovic to social-historical perspectives such as Anri Sala, Liu Wei, and Shi Qing, and emerging Chinese and Japanese artists. As the first thing that visitors saw at the fair, it left a deep impression on collectors, curators, artists, and other guests, and seemed to define the fair’s identity…

See Artron.net for the full interview with Colin Chinnery on the Future of ShContemporary.

The 3rd edition of ShContemporary, the Asia Pacific Contemporary Art Fair, is Sept 9-12, 2010.

Related Posts

• Shanghai art fair goes ahead despite advice to cancel– March 09
• Contemporary art market in Asia now bigger than US for first time says Artprice– Nov 09
• Three recession strategies for selling art in Shanghai – Shanghai Daily– April 09
• Art fair Shanghai breaks new ground with Best of Discovery emerging artists – Financial Times, Artkrush– Sept 08

Unusual art investment model launched by China Merchants Bank

ART INVESTMENT

Earlier this week China Merchants Bank  launched a new ‘art banking’ service for China’s rich says the People’s Daily Online.  The unusual model allows private banking clients to pay a deposit for an artwork and take it away to enjoy for one year after which they have the option to purchase it or return it for a full refund.

“The model is brand new in China, as art investment often involves great risk and wealthy people need time to understand Chinese contemporary art,” said Cai Can huang, deputy general manager of CMB’s private banking section.

Private clients with assets of more than ten million yuan will be targeted by the fund, who is working in collaboration with the China Contemporary Art Foundation which has amassed a collection of over 3000 Chinese contemporary works.

 

Su Xinping, Sea of Desire

“We have worked with a group of Chinese and Western art experts to pick out seventy artworks including photos, oil paintings, wash paintings and sculptures, ranging from 10,000 to one million yuan,” said Su Yan, executive director of China Contemporary Art Foundation. 

We are curious about this bizarre art investment model. It is one thing to loan art for free to wealthy clients: luring and cementing relationships with high net worth individuals who will be upsold other high-return products.

But surely it is another thing altogether to offer the reward of potential gains without any of the risks. As the wealth levels of the targeted clients are merely mass affluent rather than mega-rich, and are therefore unlikely to produce sufficient returns on other product sales, one can only assume that the lenders are pretty confident that there will be no (or minimal) gains after a year.

One is left musing… Does this say something about the outlook for the contemporary Chinese art market? Is there perhaps an issue with the quality of the artworks selected? Not the latter, we hope, as this initiative could, now that the market has been decimated by the withdrawal of speculative purchasers, play a much-needed part in stimulating engagement with art which in turn just might help spawn a serious local collector base in China.

Read more at CMB Launches Art Banking in China – Peoples Daily June 10 2009

Related posts:

• Outlook for Chinese art market – Larry Warsh podcast – May 2009 
• Is there a new way to sell art? Vitamin experiments – New York Times – May 2009
• Sneak a peak at art collection and private residence of Pearl Lam – video – March 2009
• Mei Moses index founder plans Chinese version, optimistic about Chinese art – March 2009
• Domestic demand in freefall at Chinese art auctions – Nov 2008

Subscribe to Art Radar Asia for news and art investment trends in Asia

Outlook for Chinese art market – interview Larry Warsh – Arttactic podcast

CHINESE ART MARKET

Larry Warsh of AWAsia in New York, a private organisation which provides Chinese contemporary art sourcing and curatorial services to global institutions such as MOMA and the Getty Museum, talks about his take on the outlook for the Chinese art market on Arttactic’s newly-launched free podcast service.

Warsh’s expertise lies in Chinese painting and photography by the first generation of historically important Chinese artists who came to prominence between 1989 and 1999.

Topics discussed include:

• the evolution of US interest in Chinese art – Americans ‘came late to the party’, Christopher Phillips’ show at ICP ‘Past Present Future’ 2004-5 was the start

 

• why the Cynical Realists appealed to the West

 

• the trend for major US institutions (MOMA, Getty) to buy and show global art, Chinese art and the upcoming show at MOMA by Song Dong summer 2009

 

• recommended books about Chinese art

 

• weaknesses of Chinese art scene (as yet undeveloped education, infrastructure and curatorial skills)

 

• opportunities in the market – Chinese photography

 

The promotion of Chinese art is Warsh’s self-confessed mission so it is not surprising that the bulk of the interview claims great investment opportunities for selected Chinese artists. He suggests that scarcity of supply (he says there are only 30-40 historically important contemporary artists) and the future potential of the Chinese buyer base (favourable demographics, population size and a growing interest in contemporary art) means that prices are bound to rise.

Asked why the top auction houses seem to be featuring less Chinese art in their recent sales, Warsh explains that he sees this as evidence of the scarcity of supply of quality Chinese art rather than lack of demand.

We are not quite convinced by this argument. If supply is scarce but the demand still exists, then the pieces that have been coming to the market recently would have made heady prices but instead they have fallen along with other art categories and asset classes. In Hong Kong’s Spring sales 2009 works by Zhang Huan failed to sell at Sotheby’s and at Christe’s a Cai Guo Qiang edition ‘Kaleidoscope Time Tunnel’ and a Yue Min Jun lot were passed in.

No matter, we like controversial opinions. Arttactic promises more podcasts with ‘key’ figures so we look forward to hearing a variety of views. To listen to this one go to ArtTactic Podcasts and search for Larry Warsh May 22 2009.

Unfortunately we cannot give you a direct page link – we hope that ArtTactic will iron out this wrinkle in its promising new service.

Related posts:

• Newslink round up Hong Kong art fair Art HK o9 – May 2009
• Sneak a peak at the collection and private residence of dealer Pearl Lam – video interview – Mar 2009
• Mei Moses index founder plans Chinese version, optimistic about Chinese art – Mar 2009
• What are the latest trends in Chinese art? Who are the top two emerging artists? – video interview Melissa Chiu – Feb 2009
• Domestic demand in freefall at Chinese art auctions – China Daily – Nov 2008
• Book: Chinese Contemporary Art 7 Things You Should Know – Oct 2008

Subscribe to Art Radar Asia for views about the Chinese art market

New Chinese art auction intelligence report in English free to download – Artron

CHINESE ART MARKET INTELLIGENCE

In July 2008, Chinese art portal Artron published its first 50 plus page industry report Artworks Auction Market of China: Spring 2008. The report is available in English and will be updated quarterly. Analysis is based on statistics drawn from the Artron Chinese Art Database which has data on 60,000 artists, 212 auction companies and 8,000 exhibtions to date with back data from 1970 to be added.

Artron likens itself to a boat moving constantly on the waves of the Chinese art market ocean and refers to four of China’s top contemporary artists -Yue Min Jun, Zhang Xiaogang, Fang Lijun, Wang Guangyi – as ‘The Four Heavenly Kings’ but between the picturesque metaphors there are some useful snippets of data and analysis:

• there are approximately 250 known auction houses operating in China in an increasingly competitive environment in which consolidation is expected
• Yue Min Jun’s art is the most expensive based on Artron’s price per sq metre index
• China’s top five auction houses account for approximately 50% of auction sales
• 15 year old Guardian is dominant amongst local auction houses but 2 year old Beijing Poly is now second and growing fast
• a list of top 20 local auction houses
• trends by auction category

The report is available for download http://index.artron.net/indexhtml-reporten.php

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Art market shifts from New York to London – Artprice

MARKET WATCH GLOBAL ART SALES

The growing interest shown by emerging markets (China, the United Arab Emirates, India…) and good performances from traditional markets resulted in spectacular figures for the first half of 2008. This has silenced the sceptics who were still expecting economic woes to have a knock-on effect on auctions. The first Half of 2008 at auctions has so far countered gloomy and alarmist prophecies of a recession with sales of EUR 3.8bn (more or less equivalent to the EUR 3.7bn for the same period of 2007) and 504 bids over a million euros compared to 517 as of July 1st 2007. The art market has repeated the record performance reached in 2007 without beating it.

The big surprise comes from the UK which has not only unseated the US at the top of the sales tables but sold fine art worth more than GBP 1.5bn, or GBP 220m more than over the same period in the preceding year. 256 works in London went for more than a million euros, with 2 of the 3 highest global deals in the first half including a Claude Monet sold for EUR 46m and a Francis Bacon that fetched EUR 31m. For the first time in 20 years, the US has lost the first place to the UK.

But although the UK and the US are fighting it out over the top step on the podium, they still share most of the cake with 77% of global sales volume. China and France are far behind in 3rd and 4th position respectively with a combined 11% of global sales.

France, beaten for the first time by China in 2007, is slowing down, a constant decline confirmed by cautious buyers. Despite well-publicised sales in May that showcased major works by Francis Bacon or Louise Bourgeois, France posted a number of no-sales that was a world record: 50% of works on offer failed to sell!

See (in new window)

• full article on Artprice site
• Sothebys to move Asian auctions from New York to Hong Kong dated Aug 2008
• Price rise of contemporary art structural – Financial Times July 2008

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