LONDON.- The Chinese art market has come an incredibly long way in a relatively short space of time. We have witnessed the evolution of a global market created by Westerners to now a more inward facing, localised market largely driven by the major interest from Chinese buyers. But global and now also local interest in the Chinese art market is still only in its infancy. As time goes on the quality of work will reach new levels, education in the region will improve and the impact of censorship will decline, driving prices higher and higher.
In years to come I predict we will look back at todays market and realise that this was only the very beginning.
Before 2006, global awareness of Chinese contemporary art was somewhat limited. Despite China being included in the Venice Biennale for the first time in 1993 and exhibitions such as 'Magiciens de la Terra' at the Pompidou in Paris, which included Gu Dexin and Huang Yong Ping, taking place in 1989, the number of individuals aware of Chinese art remained very limited. At this point in time Chinese exhibitions were rarely at the top of the not to be missed lists and a lack of knowledge and understanding in the region curtailed growth in the market and prevented it from operating at its optimum level.
The process of accommodating and accepting a culture of contemporary art has also been a gradual one in China . The birth of Chinese oil painting can be placed in the early decades of the 20th century but after the founding of P.R.C, art was used as a propaganda tool to communicate Mao Zedong's political messages to the masses. Solidarity was expressed through Soviet inspired social realist painting and during the Cultural Revolution from 1966-1976, arts and culture in China was at a standstill. Art became a political weapon and the natural development of individual creativity completely ceased to exist.
1976 was the big turning point for art in China . Chairman Mao passed away and his wife Jian Qing and her colleagues, known as the 'gang of four', fell from power. The result in cultural terms of this shift in power ending the Cultural Revolution was the greater acknowledgement and acceptance of art. In 1979 the Chinese Avent-Garde artists began to push boundaries and experiment and artistic freedom began to flourish, giving birth to Chinese contemporary art.
It took some 30 years from the time that Deng Xiaoping took over the reins of power before we began to witness real accelerated growth within Chinese contemporary art. From a market perspective a Sothebys New York sale in April 2006 proved to be a particular milestone when, for the first time, a piece by a Chinese artist, Zhang Xiaogang, broke the $1million mark (he later went onto break $10 million in Hong Kong in 2011). This was to be a benchmark sale that would go on to change the face of the Chinese contemporary art market significantly.
Just two years later, further changes were noticeable. Up until 2008, the market had remained a Western-driven one. While buyers in Asia existed, it was Western collectors who were willing to pay the most for Chinese works. As time moved on, however, Western buyers began to play a less significant role and in 2009 the rise of the Chinese buyer became far more apparent.
Today it is these Chinese buyers who continue to drive the market forward. A good example of the power of this emerging group is husband and wife Liu Yiqian and Wang Wei, perhaps the most powerful buying force in the Chinese market, who are rumoured to have spent almost 2 billion Yuan (around $317 million) on art in the past two years. In May 2011 they made their mark at the very top end of the market when they paid $65.5 million for a work by Chinese artist Qi Baishi, titled "Eagle standing on pine tree" from 1946. Now the pair is investing in building the Dragon Art Museum , a major new private museum in Shanghai , to display its collection in its entirety. Since then, there has been no evidence to suggest that this trend is slowing down. In fact, the very opposite is true, as we witness more and more buyers from China making themselves known as key players in this growing market.
And Liu Yiqian and Wang Wei are not alone in contributing to the mass emergence of private museums in the region; for this generation of Asian collectors, the creation of bespoke private spaces is becoming something of a necessity in order to house and showcase their art to the world. More private museums are set to appear in Shanghai , including that of Budi Tek, while the collector Guan Yi is rumoured to be working on a space on the outskirts of Beijing , adding to the long line of non-profit ventures in China . This trend bears great similarity to that which we witnessed some time ago in Europe and America, where the combination of enthusiasm for art and philanthropy led to the creation of now globally recognised museums, built and financed by some of the regions wealthiest art lovers.
And the creation of wealth continues to occur at a pace in China . The number of billionaires expected to be created in the region over the next few years outstrips the number in the rest of the world by a ratio of almost 2:1. The quantity of individuals in a position to invest in art will therefore continue to grow and as demand rises, so too will prices. These buyers are younger than many would expect too. Chinese collectors and investors are not only economically solid but they are, in the large part, below the age of 50 and are fast becoming some of the most avid consumers of art produced by artists from their home regions.
Not only has wealth and the appetite for art in China increased significantly over time but the auction market has experienced dramatic growth. In 2010 Artprice revealed that China had become the worlds leading auction marketplace for Fine Art. It took only three years for China to climb to the number one ranking, positioning it ahead of the United Kingdom and the US , which had been the global market leader since 1950. In fact, China now boasts seven of the worlds top 10 auction houses according to revenue. Even some of the most prestigious auction houses in the world, including the likes of Sothebys and Christies, are losing ground in the face of Chinese auction houses. Take Polys International for example which, having only been founded in 2005, has already outperformed Sothebys, an institution founded in 1744 and with roots deeply embedded in the London , New York and Hong Kong markets. According to Sothebys CEO Bill Rupert, the size of the market for Chinese painting is $4 billon a year - more than Sothebys and Christies combined Impressionist, modern and contemporary sales last year.
If we drill down further into China s regional markets, we can see that Beijing in particular is performing incredibly well. The city is now second in the global market for contemporary art and is competing with New York, particularly at the highest end of the market, where the level of quality and prices have exploded over the last decade. Hong Kong , meanwhile, has emerged as the new epicenter of the global arts market. The growth in interest and activity in this region is due in large part to significant commercial advantages that exist. Free port status, tax exemption on import and export of art and more liberal regulations than either Shanghai or Beijing offer, makes this market a very appealing one. There is also a good level of English spoken in Hong Kong , making communication and understanding far easier and more accessible.
Findings from The International Art Market in 2011: Observations on the Art Trade over 25 years revealed it is China that in fact now boasts the greatest share of the global art market, a share which rose from 23% in 2010 to 30% in 2011, as the region overtook the US for the first time. Works by Chinese artists are now contributing more heavily than ever before to the overall economic growth in the art market. Today, five Chinese artists feature in the worlds top 10 contemporary artists by revenue. Zeng Fanzhi (39.2m), Zhang Xiaogang (30m), Chen Yifei (283m), Wang Yidong (16.2m) and Zhou Chunya (14.5m) now each feature, ahead of the likes of Damien Hirst and Takashi Murakami.
But despite the huge growth we have witnessed in recent years, there remains opportunity for further advancement. The Chinese art market relies too heavily on the major auction houses that I have already touched upon. The dominance of the auction houses in China is far greater than that in Europe or in America . Their power and influence means that the market can, at times, lack diversity, as they are able to control much of what is brought to market. This is partly driven by a powerful culture of trophy buying that exists amongst many Chinese buyers, which leaves a lack of enthusiasm for dealing privately. Buyers here like to be seen to be spending large sums of money, particularly for the most iconic works, and the best way to do so is to buy in person at auction. If we are to contrast this with the US and European markets, the scenario is very different, with buyers in these regions very often opting to purchase in a more discreet fashion and to remain anonymous wherever possible. This is evidenced by recent sales, including that of Edvard Munchs The Scream, which was recently bought at auction at Sothebys New York by an anonymous telephone bidder for $120m.
This culture of trophy buying also highlights a somewhat misplaced focus in China on the lucrative investment that buying art might represent. In 2011 art was in fact China s hottest investment. With a far more favourable rate of return on investment than the unstable stock or housing markets, more and more of the countrys wealthiest continue to explore alternative forms of investment and art is, it seems, becoming more attractive by the day. In 2011 China s two largest auction houses, China Guardian Auction Co and Poly International Auction Co recorded a 49% and 20% rise in turnover respectively year-on-year. Just this month Wan Shan Hong Bian by the late Li Keran sold for a record price at 293.25m yuan ($46million) at the Beijing Poly spring auctions. While sales such as these on the surface appear to reflect a growing love for art, in reality for a lot of Chinese buyers they actually suggest a growing interest in a product which could one day present a solid return on investment.
If the market is to continue to grow and to flourish, it is essential that the focus moves away from investment potential, and instead prioritises the quality of work and the quality of the artists. We must also be doing more to support the new generation of Chinese artists and we should monitor the progress of names including Sun Yuan and Peng Yu, Wang Qingsong, Wang Guangle, Cao Fei, MadeIn, Liu Wei and Jia Aili. These are among some of the brightest prospects for the Chinese art market.
There is also a great deal of work to be done in terms of awareness and education in China . Lack of education and limited specialist expertise continue to curtail the market. There are very few people with a real in-depth knowledge of the Chinese market and this can prevent it from operating at its optimum level. More must be done to educate the next generation about the contemporary art scene in the region; only then can the industry go on to achieve its full potential.
China also needs to focus on stabilising some of its activities in order to attract investment and generate interest internationally. It is essential that the mainland auction market becomes more reliable and transparent and focuses more on the authenticity and quality of the work and less on the opportunity to produce sales results.
The issue of censorship has played a significant role in China s art history. However the region is increasingly open to, and even encouraging of, a culture of artistic freedom. While there remains a level of censorship, as recent incidents involving Ai Weiwei have reminded us, it seems that Chinese communist leaders have become more willing to accept the importance of cultural prosperity. Changes of this scale do not happen overnight but they are most certainly underway in China , providing a sense of promise to new artists who have their predecessors to thank for paving an easier road for them.
The Chinese contemporary art market has achieved a great deal in a limited amount of time. In order to continue along this path of growth, the market must focus on enhancing awareness and understanding, embrace artistic freedom and treat quality as a priority. Only then will people stop questioning the sustainability of this market, which has only just begun.