The art of speculation

China’s modern art market takes a tumble

The art of speculation

Not so palette-able: Chinese art

The Chinese speculate on the contemporary art market just like they do on the horses or the stock market.

So not surprisingly, with the Shanghai Composite Index falling 62% from its all time high in 2007, the country’s once sizzling art scene seems to have cooled down too.

After the flurry of record prices in recent years – last year 11 of the world’s top 20 best-selling artists were Chinese – auction heydays seem to have faded.

But even more established artists are reporting tough times; in May last year, contemporary artist Zeng Fanzhi wowed the art world by fetching a record-breaking price ($9.7 million) for his painting, Mask Series 1996 No.6 at Christie’s Hong Kong. Yet in December last year, the artist’s other work was left unsold after failing to meet its reserve price of $3.8 million.

Many blame the global financial downturn for China’s slowing contemporary art market. In general, collectors are reluctant to buy in a falling market and some are waiting for prices to bottom out. Chen Yan, owner of Yibo Gallery in Shanghai, told Shanghai Daily: “They [buyers] treat artwork like stocks: they want to purchase some artworks at the bottom price, just as they did in the stock market.”

The art market has it own share of dirty dealings. Dubious activities such as artists buying back their own works at auctions to push prices up, or paying middlemen to inflate their prices, are open-secrets in the industry. Some reckon that as much as 80% of the country’s transactions are “fake” ones.

While established and well-capitalised artists such as Zeng can wait out the downturn, younger, aspiring ones are struggling to survive. The 798 Art District in Beijing, the country’s contemporary art hub for young artists, is one of the victims of the slowdown. According to Western China Metropolis Daily, a quarter of the galleries have shut down and many are in negotiation for rent reductions. The district, which once symbolised the country’s vibrant art scene (and its money-making possibilities), has seen visitor numbers plummet.

Despite the gloom, many industry observers believe that the current slowdown will promote a healthier environment for the local scene to flourish over the long term. For one, the falling prices have all but driven out speculators. Art pieces are now much more affordable for art lovers. And many are confident that artists who show quality work will still be able to command high prices when the market rebounds.

Indeed, according to Shanghai Daily, many artists are actually relieved after the bursting of the bubble. The more subdued environment has allowed them to focus on their art rather than feel pressured into mass-producing their most popular works. In an interview with the New York Times, Jerome Sans, director of the Ullens Center for Contemporary Art in Beijing, says: “Now we can have production of the mind, not just the product. No more of this making fast money.”

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