Business of art or art of business?

05/08/2002
Business Weekly: Yang Yingshi

The Chinese art community was ecstatic last week over the results of some Beijing auctions.

An ink painting of birds by 12th-century Emperor Huizong (Zhao Ji) was sold for 23 million yuan (US$2.78 million) to an anonymous buyer during one of China Guardian's spring auctions last Tuesday.

When the auction firm's 10 per cent commission is added, the total cost of the painting rises to 25.3 million yuan (US$3.06 million).

This is the highest price a single Chinese painting has ever achieved on the local market, according to experts.

The sale was the biggest deal in China Guardian's 2002 spring auctions, which achieved a record total revenue of more than 100 million yuan (US$12 million).

Its other major sales included an ink painting by Shen Zhou, an artist from the Ming Dynasty (1368-1644), which sold for 2.2 million yuan (US$266,000). A porcelain vase produced during the Qing Dynasty's Qian Long period (1736-96), sold for 2.53 million yuan (US$306,000).

The earlier spring auction of the Zhongmao Shengjia Auction Co brought in a total revenue of 68 million yuan (US$8.2 million). The biggest deal was a figure painting by Yan Liben, a painter from the Tang Dynasty (618-907). Beijing's Capital Museum bought it for 8 million yuan (US$966,000).

Although some buyers refused to be identified, there are signs that most of the works of art at last week's Beijing auctions were sold to collectors or organizations from the Chinese mainland.

Experts said the successful sales are evidence of a reviving Chinese art market as both the purchasing power and desire of Chinese art collectors keep growing and the operational mechanisms of the art business are being better accepted in China.

Kou Qin, vice-president of China Guardian, attributed the revival of the Chinese art market to "the political stability, economic prosperity and the growing interest in collecting art in China."

According to Kou, the Chinese art market began to take shape in the early 1990s, when art auctions were introduced on the mainland.

But, in the beginning, the Chinese mainland's art market primarily relied on overseas buyers, particularly collectors from Japan, the United States, Europe, Southeast Asia and the regions of Taiwan and Hong Kong.

Because of the Asian financial crisis that started in 1997, the Chinese art market experienced a low period when overseas buyers cut back on their investment in collecting art.

Another disaster was the September 11 terrorist attacks in the United States last year, which worsened the economic decline in North America and Europe. As a result, budgets for many art and cultural events there have been cut and the public's enthusiasm for collecting art has dropped.

The situation in China, however, gives cause for optimism.

Besides enjoying a peaceful social environment, the country has witnessed constant and stable economic growth in recent years, with the annual economic growth rate being as high as 7 or 8 per cent.

Government statistics indicate that the bank savings of Chinese citizens have exceeded 6 trillion yuan (US$725 billion) and they have another 1 trillion yuan (US$121 billion) in cash on hand.

Zhu Haoyun, an expert on the art market, said: "It is true that most Chinese citizens are struggling to buy their houses and cars at present. When these desires are eased, collecting art will naturally become one of their major concerns."

In an article published in a recent issue of China Art Weekly, Zhu even predicted that "the fourth highlight of art collecting is coming to China."

According to Zhu, the previous three highlights happened during the late Song Dynasty (960-1279), the Kang Xi (1662-1723) and Qian Long periods (1736-1796) of the Qing Dynasty, and the period of the early Republic of China (1912-1949).

During these periods, art collecting was a national pasttime and enjoyed the avid participation of Chinese people from State leaders to ordinary citizens, Zhu explained.

Although the involvement of individual art collectors has always been important, public and private organizations in China have been more competitive and active in the local art market in recent years, experts said.

In 1995, the Palace Museum (Forbidden City) took the lead by buying an ink painting by Zhang Xian, a painter from the Northern Song Dynasty (960-1127), for 19.8 million yuan (US$2.39 million) and another painting by Shen Zhou for 8.8 million yuan (US$1.06 million) at auction.

In 1996, a company from Shaoxing in East China's Zhejiang Province bought a handscroll painting by Ming Dynasty painter Shen Shichong for 940,000 yuan (US$114,000) at a Beijing auction and sold it three years later for 3.38 million yuan (US$408,000).

Enterprises such as Beijing's Poly Group, Dalian's Wanda Group and Nanjing's Wangchao Art Co have also been highly active in the Chinese art market.

Zhu said that when organizations and companies collect works of art, they hope to protect the nation's artistic treasures or use their purchase as an investment or as self-promotion.

Beijing collector Liu Yong said: "It is good that more and more domestic collectors have realized the value of Chinese works of art and are enthusiastic about collecting them. This will definitely help raise the prices of Chinese works of art to more reasonable levels."

He pointed out that the overall price levels achieved by Chinese works of art are still low compared with Western art.