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Opening ceremony CIGE 2004 (c) CIGE

The birth of a world economic power

China began its great economic reform after the death of Mao Tse Tung – 1976 – , mainly after 1978, when Deng Xiaoping rose to power. His development framework has long been considered primitive, belonging to a backward country governed with an iron hand by a unique authoritarian party for a long time. But after a short time, communist China no longer scared investors coming from all over the world. Hundreds of American and European companies opened their industries there, attracting millions of workers. Chinese products soon made their way into the world market, affecting the economies of Western countries: the US, being the country who was most affected increased its deficit towards Peking to $130,000 million in 2003. It is an economic power whose proportions scare the whole world. According to the financial department of the italian newspaper “L´Espresso” the entry of a giant with more than 1.3 billions of inhabitants in global economy changes the world we live in and nobody is safe from its consequences: Goldman Sachs Bank calculates that Chinese economy will overcome Germany in four years, Japan in ten, America in 35.

CIGE 2004 © CIGE

The birth of the chinese art market

The restrictions applied to exporting art in China hindered the economic boom which hit the fields of production and exchange. These restrictions prevented works of art dated before 1949 to leave the country; strict laws were also applied to the transportation of works of art inside the Chinese territory. This is the reason why the role played by China in the international art market, though more and more relevant, is not strong enough to change its course. Nevertheless, the structure of the art market has recently become clearer, in this nation where free market and all fields of artistic production are rapidly growing. Through fairs, galleries, auctions, exhibitions, and private sales, the Chinese art market offers an unlimited range of possibilities for artists, collectors, traders, and art critics today. The political world does not know how to regulate this recent phenomenon. It is not easy for artists, trying cope with artistic inspiration especially with all the new market requirements, and all this whilst still trying to find a balance between art and profit. Finally, it is not easy for collectors and for investors, especially for the less experienced who find themselves in an unknown arena - the new art market - where they are not often successful. From the beginning of the ‘50s till end ‘70s, works of art were bought and collected mainly by state museums - e.g. Peking’s Rongbaozhai -, galleries and other public institutions. Private collections were not as important and had a so to speak “underground” existence since works belonging to these collections were not bought directly but commissioned by collectors directly to artists. When the Chinese market opened with the reform at the beginning of the ‘80s, many galleries and art shops - today almost 3000 - arose in the country, selling contemporary works by chinese artists. Some of these institutions born in the main cities of the territory, e.g. the Red Gade and Peking Courtyard or Shangay ShangART, are all managed by Western gallerists. Together with some Hong Kong galleries; Hanart and Schoeni, and some Taiwan galleries; the most famous example in China, of a business managed on international cooperation grounds. The Chinese art market is growing. According to some statistics, in 2000 sales of works of art reached almost 2 billion yuan per year - $240 million - these were, and still are, mainly located in the biggest cities: Peking, Shanghai, Nanjing, Guangzhou, Chengdu, Hangzhou, Tianjin, Xi'an, Zhengzhou, Changsha, Suzhou, Shenzhen and Zhuhai. Hong Kong, Taipei and Macao are other important centers of the Chinese art market. Private collectors and businesses originating from the biggest cities of China play an increasingly active role in the recent activity of trading. The presence of a domestic art market can be due to the fast economic growth of the country allowing a growing number of people to purchase works of art. According to the statements of some collectors, a Chinese painting dated 1900 can cost more than one million yuan - $120,000. Qi Baishi, Xu Beihong, Zhang Daqian, Fu Baoshi, and Li Keran, are names of only a few of the most requested artists. Eventhough home economy has grown the dimensions of the chinese art market are still small. This is not just because of the economic crisis which struck South East Asia, reducing the number of buyers in those areas, but also because of the huge amount of imitation and counterfeit art that is appearing in the market. Moreover some artists create works of art characterized by a strong political atmosphere in order to meet the requirements of western collectors, who are more interested in social conflicts and ideologies than in art itself. Experts think that the government should intervene by regulating the art market with strict laws, and restricting the trend of producing and trading counterfeit art. Some experts criticize artists who prefer to sell their work privately and not in market law system, thereby raising and strengthening tax avoidance and making it difficult to develop a network of intermediates and agents for the chinese art market. In this context it is very difficult for galeries to survive. In an interview for the two-monthly Berlin review ‘Das neue China’ chinese artist Li Jiwei speaks about the situation of art market in his country. He states that although the situation has developed since the ’90s, the Chinese art market especially that of contemporary art is still only a small-dimension business. Few people are interested in buying works of art or are not in the financial position to do so. They usually prefer European landscape paintings to the works of their compatriots. For this reason, Li Jiwei adds, many artists try to sell their works on the foreign market. There is a foreign market for art in China where artists can sell their works at a relatively high price: foreigners can pay more than people from their own country. On the whole artistic production and its foreign trade are balanced and in some ways can even be seen as complementary: Chinese people have bought modern western art, and at the same time some Chinese artists have sold their works to foreigners.

© Hanhai Auctions´s office

Auction houses

The increase in auction houses sales in past decades must not be overlooked. Auction houses have been active in China since 1992 when the Chinese communist government legalized the private art market. Before this date the art market was controlled by the State where private sales would result in fines, in theory. The first auction for artworks in China took place in Shenzhen. Sales of this kind had such a great success that during the ‘90s, more than 100 auction houses were founded in the main cities, some of which survived only for a short period. The most important houses were ‘Guardian and Hanhai’ in Peking, and ‘Duoyunxuan’ in Shangai. The amount of sales from auction houses is still not so great; seasonal auctions gain between 60 and 100 million yuan. One of the highest profits for a single sale was Guardian’s 9.8 millions yuan sale in autumn of 1996, for an ink painting by Fu Baoshi bought by an anonymous businessman from Milan, and 9.9 million yuan spent by an anonymous state business in December of the same year for a calligraphy piece that represented the emperor Song Gao. On December 12th, 2004 China opened its doors to foreign auction houses fo rthe first time. Thereby fulfilling its duties as a member of WTO. This episode closed the extraordinarly positive year for the Chinese art market. Between end October and beginning November 2004, the art sold at Christie’s, Hong Kong reached 35 million pounds. Whilst sales in Sotheby’s auctions amounted to 42 million pounds. At Christie’s, Hong Kong an anonymous Asian private collector paid 515.531 pounds for artwork ´Reclining Nude` by Chinese artist Sanyu - twentieth Century.

CIGE 2005 © CIGE

Art fairs

Another important phenomenon of the emerging chinese market is that of art fairs, active in China since 1993. The first art fair took place from the 16th to the 25th December 1993, in Guangzhou. The journey to establish a market of this kind was not easy. Only after many long and tiresome negotiations did the Department of art, part of the Ministry of Culture agree to help and support the art fairs economically.
At the beginning the artists were only looking to sell their works individually. In recent years however, the number of galleries who represented these artists have increased. The tax on artworks was strongly reduced in order to attract a higher number of visitors and potential buyers from both China and abroad. According to statistical figures the percentage was reduced to 19% while in 1993 it was 50%. Nonetheless “many of the booths became the window of private dealing, boosting tax evasion”.
The main chinese fair centers are in three big cities: Peking, Shanghai and Guangzhou. Art fairs are so important because they affect not only the market, but also the cultural and political aspect of the city which hosts them involving e.g; touristic and infrastructure sectors. The art market linked to fair sales is still a small phenomenon, not really known at an international level, this is also because of the immense competition from more popular fair events such as: Art Basel in Switzerland, Documenta Kassel in Germany, Armory Show in New York, FIAC in Paris.
“For a correct developement of chinese art fairs” affirms Victoria Wang, member of CIGE commission - Cina International Gallery Exposition - responsible for the official Internet website of the fair, "we need to improve the following points for the healthy development of Chinese art fair:
1, Identify the cultural positioning of the art fair;
2, Identify the majority of exhibitors;
3, Broaden the operating channels, separate the levels;
4, Give top priority to the application of high-technology, do good in services;
5, Strengthen the macro-management, establish the management system fit for market development."

Mr.Dong Mengyang and visitors on the spot© CIGE

The roles played by the artist and the collector

Finally, a necessary hint to the roles played by the artists and the private collectors in the art market; their impact on the rapidly developing free market, in their country. In the previously mentioned interview for the two-monthly review “Das neue China”, Li Jiwei mentions the roles played by the artists in the market, stating that artists themselves are not bound to follow its rules passively but can still have an affect on its trends. In 1993 Chinese contemporary art was exhibited for the first time in Germany, in the exhibition ´China Avantgarde`: according to Li Jiwei it was popular art with a political background, similar to the American art of the ‘60s. Andy Warhol was, in fact, the emblem of the contemporary artist who tries to change art market directives and to bend them to exigency through his production: unknown and unemployed, Warhol tried to turn the situation of art market to his advantage, thereby affecting it with his works. In this way, Warhol was not only a good artist, but also an excellent dealer who fully achieved his aim.
Li Jiwei says that the condition of artists in China today does not differ so much from that of the European artists. It is extremely difficult for contemporary artists to enter the art market in successfully – in China as it is in the rest of the world too. The only advantages for the contemporary artist are the freedom of expression and the possibility of using time and ability in an autonomous way. Until a few decades ago it was not so. An artist in China would have had to belong to one of these two categories: either he was recognised as an artist by the State, and therefore he would have to travel and observe the landscapes he wanted to paint, or he worked outside of the system and society didn’t recognize him. In this case it was extremely difficult for him to be a part of the art trade circuit.
As for private collectors, both Chinese and foreigners - the latter coming mainly from the USA - have played a very important role from the beginnning of the twentieth Century within the Chinese art market. Private sales have always been, and still are the main channel for the art trade.
Pang Yuanji, 1864-1949, was one of the most famous private collectors; his activity was useful to receive and appreciate Chinese art in Western countries. He was a collector, a dealer, a lover, a philantrope and a member of different art clubs in Shanghai. He had important contacts with art clubs and was committed to the promotion and diffusion of Chinese art in Japan and in the USA. He methodically catalogued the vaste collection of Chinese paintings and ceramics present in the USA, the results of this work was widely used by American collectors. Furthermore, during the first years of the twentieth Century Pang bought some works from this collection he then exhibited them in order to promote Chinese art sales in America. Both public museums and private collectors bought works directly from Pang. Among the buyers was Charles Lang Freer, who gave his whole art collection and the building which hosted it - the Freer Gallery of Art - to one of the main Asian art galleries in America, the Smithsonian Institution di Washington. Pang and Freer, two characters who represent the Chinese and American collectors of their times. The analysis of their collections is the basis to understand the standards of Chinese painting and the way in which it was and is still perceived from the outside.

Text: Camilla Fabbri
Translation: Caterina Magro

Ramonet Ignacio, in LE MONDE DIPLOMATIQUE 08.2004.
"Das neue China" in Kunst und Kommerz, 09.2001/3.
Victoria Wang, "Chinese Art Market & Chinese Art Fair Market".


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