Chinese art market has been developing for 30 years. The total turnover of spring auctions jumped from 664 million RMB in 2000 to 42.6 billion in 2011. It has developed from Hundred Million era to Capital era, moving into 2012 with the reputation as World No.1. However, in that prosperous period, there were many problems appearing. Mr. Yang Xiaoyan, assistant dean of School of Communication and Design of SYSU, thinks that rational choices for the future of Chinese art market will be made among problems.
Top Three Problems in Art Market
I started to pay more attention to the field of art and meet more collectors after I took over the preparation of construction of the Department of Art Management in Guangzhou Art Academy. Collectors have raised plenty of questions, which also generated much puzzlement and some ideas in my mind: Firstly, some collectors who spent a lot on collections had found that many of their collections are fakes. And this situation is quite common. In the second place, they don’t want to admit it. I can understand it. That is because those collections which cost millions would become valueless if they admit it, while if they keeping arguing about that, there may be still some hope. As I know, there are some websites are promoting appraising works by galleries or artists themselves, intentions of which is nice, and hopefully, it could be effective. Let’s wait and see. So, this is the first problem I prepared to talk about: Real thing aren’t real, while fakes aren’t fake.
The second problem is, like play Jiguchunhua, that somebody throws the ball and somebody should catch it. Several years ago, when there wasn’t so high price in Chinese art market and art works hadn’t been recognized as profitable investments, collectors were able to collect plenty of nice pieces. I knew some amateur collectors. They collections were amazing. However, today I wonder whether there are really collectors or only investors left. I really doubt it. In western countries, there are still many collectors who are willing to donate their life-long collections to society for establishing private museums, such as the famous Solomon R. Guggenheim Museum in the USA and the Tate in Britain. Those great collectors are rewarding the public and society. Can we expect those investors to do this in the future in contract to it? It’s such a tragedy caused by the lack of collectors. However, if the game is played on, there must be somebody selling and somebody buying. This is the way a market works.
The third problem is reputation is replacing prices. People are wondering how artists can gain reputation, and whether we should connect reputation with the quality of works. In other words, under the present typical Chinese social system, reputation is connecting with established status in government and society. Are those professional and amateur painters without any status able to gain more reputation and even higher prices for their paintings? I personally feel pessimistic about that, because pricing paintings by reputation gives overriding priority to gaining repute and making more and more people concern about and pay more attention to it.
Marginal Benefit in Chaos
We have been criticizing the chaos in Chinese art market. I have been observing the primary and secondary market, in which some galleries are facing some serious problems. It’s quite awkward to talk about situations of Guangzhou local galleries in Guangzhou. I am familiar with some operators of galleries here. They have complained that it’s too difficult to run galleries here, and it makes me unwilling to cooperate with galleries here. I also know that lots of collectors would rather buy works of art in Beijing than in Guangzhou. Mr. Yu Ding talked about his attempt to draw up a plan for Guangdong art market just now. However, I think Guangzhou is an interesting place having its own characteristics. People shouldn’t simply compare it to Hong Kong, Beijing or Shanghai. It needs everybody to explore about how to make the art market of this leading city of opening up and economic reform prosper. In western countries, there is an important tax policy that it’s duty-free to collect works of art. It has led a number of corporations, syndicates and private institutes, such as accounting firms and law firms, to start running their own art galleries so as to express their love to arts. It’s a good idea for them to invest a certain portion of their income to art market, because the value of works of art will increase and their investment is tax-free. Then why not? So this policy has encouraged western corporations to invest in works of art, in contract to which, it lacks effective policies to encourage rich people and corporations to invest in works of art in China. This is a big problem.
Some chaos may make people worry about the future of Chinese art market, but actually Chinese people are smart and rational. There are two basic starting points in economics: firstly, human beings are rational animals, and selfishness is a rational choice; secondly, clean out the good with the bad. Therefore, making chaos may be the best way to achieve profit and chaos is also a rational choice. Maybe traders in this field think that it’s a good choice.
When chaos develops to a certain extent, the benefit from the original chaos is decreasing, the original marginal benefit is becoming smaller and the damaged areas bigger, demands for system would become real, then establishing rules would become a trend. And now, I think China is advancing in such a trend slowly. So in this process, we can still learn from advantages of mature markets abroad, especially in aspect of establishing market system and founding art galleries. Though I don’t expect to find pure charitarians, I am still optimistic about the future. The construction of the legal system we are expecting requires impetus, and the achieving of impetus largely depends on how we play the game now. Probably, it is just the Chinese character that the art market can only be standardized in the process of advancing, reversal, chaos and steady institutionalization.