Artistic ambiguity

Chen Feili runs a small knockoff gallery on Shanghai’s Yongjia Road. A self-trained oil painter, he is both prolific and indiscriminate; he will copy anything. The walls of his gallery are a riot of color where copies of Van Gogh hang next to Yue Minjun’s iconic grinning heads, unidentifiable landscapes and bowls of fruit.

"Business is good," he said. "Most of my customers are foreigners, but there wasn’t any impact from the economic crisis. My prices are really cheap." Chen will reproduce a copy of any painting (most snapped by cell phone cameras at art museums) for RMB250-800 (US$30-120), depending on size. For another RMB200, he will throw in a frame.

Chen used to have a neighboring gallery which dealt in original works of contemporary Chinese art. He said it had closed down. "Business was not so good for them," he said. "Their stuff was too expensive."

Chen was wrong about the gallery next door – it had actually relocated to bigger digs – but Chinese contemporary art was indeed too expensive for a lot of people in 2009. According to a report by Artprice, China’s top billing contemporary artists saw their works sell at significant discounts in 2009. For example, Wang Guangyi’s total revenues shrank 75%. Prices for works by Yue Minjun declined by 84% and Zhang Xiaogang’s by 86%.

After a rough 2008, global auction house Christie’s reported a 59% decline in revenues produced by contemporary art auctions in 2009. In response, Christie’s and competitors like Sotheby’s took drastic action. Most stopped guaranteeing minimum sale prices to sellers, reduced reserve prices, consolidated departments and initiated layoffs.
   
Mad, bad market

While it is usual for art prices and transactions to plummet during downturns, some said the Chinese contemporary market was particularly due for a correction. Overall Chinese art auction revenues actually rose 25% in 2009, allowing the country to supplant France as the world’s third largest art auction market.

"The Chinese [contemporary] art market got crazy," said gallery owner Magda Danysz, who operates galleries in Shanghai and Paris. "A lot of business people figured out that this was a sector where they could create value through marketing. Artists were driven to produce too quickly. Something in the logic was going wrong and people started asking why."

Many blamed speculators, but others used a wider brush. James Panero, in a caustic article in The New Criterion, said that Chinese contemporary art has become over-commercialized and profoundly fraudulent, expressing little more than greed and the soft power of the Chinese state: "We have brought back home an imitation art, cheaper, more compelling than the real thing, but containing the fatal taint of melamine."

Art critic Richard Vine, in his book New China, New Art, railed against Chinese contemporary artists, accusing them of "blatant imitation of other artists’ works, willingness to pay for art criticism and museum exposure, refusal to adhere to dealer-artist exclusivity, an elastic notion of ‘limited’ editions, and mass replication of the artists’ own most successful motifs."

The "mass replication" issue is real, and helps explain how Chinese contemporary artists manage to generate world-beating net revenues even though their individual pieces sell for much less than their Western peers. The cash is nice, but the long-term risk is market burnout. "You can ruin an artist by over-saturation," Danysz said. "An artist can’t change names and start again." She not only blames the artists but also the galleries for encouraging over-production.

As far as artistic fraud is concerned, Professor Lin Zhi, who trained at the China Academy of Fine Arts in Hangzhou and now teaches art at the University of Washington (UW) in the US, prefers to call it a misunderstanding. "Contemporary art is so concerned with social problems," he said. "Because of their limited understanding of Western culture, Chinese artists took the form but lost the meaning. It’s the difference between music and Muzak.

"But we should also blame Western curators; they came to China, they picked up this stuff and promoted it."

However, as the global economy recovers, it appears that caution is once again being tossed in the turpentine. In both galleries and auction houses, works by Chinese contemporary artists are starting to fly off the blocks. Sotheby’s Hong Kong 20th Century Chinese Art Spring Sale in April netted US$13.2 million, US$3 million more than was estimated.

Certain works by artists of established reputation blew past expectations. Liu Ye’s dystopian Bright Road sold for nearly triple its high estimate at US$2.46 million, setting a record for the artist. Zao Wou-ki, a French-Chinese abstract painter, sold multiple works at estimate-trouncing prices. A work by Yue Minjun, one of the most famous "mass replicators of successful motifs" in China, sold for US$1.88 million. 

"We are looking at a very quick correction," said Ingrid Dudek, vice president and senior specialist in Asian Contemporary Art at Christie’s. But she doesn’t believe it is due to renewed recklessness. "I do think, up until the crash, people were just buying names. Almost anything could sell … [But] even in uncertain times, I think there is incredible demand [for Chinese art]. What will come out of the correction is a more mature and a more selective market."

As an example of the durability of demand, she points to an untitled work in Zeng Fanzhi’s "Hospital" series, which sold last November for US$2.5 million, US$1 million higher than the Christie’s estimate, despite the fact that it was the work’s second time at auction.

A gallery owner in China who asked not to be identified concurred with Dudek. He noted that while some of his artists have begun to sell rapidly, customers are no longer rushing to bid for any work with Chinese characters on it. "Not all the galleries are recovering," he said. "So I think buyers are pickier. But my problem is not that my artists produce too much, but that they can’t produce fast enough." He said that private buyers are now snapping up work without bothering to haggle: "I say, ‘RMB90,000.’ They say, ‘Okay.’"

Buy high, sell higher

For the investor or the collector, the question of who to buy, when to buy and how much to pay remains vexing, and the recent recovery in prices doesn’t help. Works of contemporary art are especially risky: By definition, there is no historical certification of the avant-garde, which makes investing in it more akin to venture capitalism than playing the stock market.

Good information is also a problem. While the West has a large pool of secondary experts debating the artistic merit of a given work, China is short on disinterested critics. "You don’t yet have a fully mature museum, critical or curatorial system," said Dudek of Christie’s. "What’s very difficult for young Chinese artists today is that the dominant measure of artistic value in China has been price. You don’t have other competing discourses of value."

Lin of UW added that the proliferation of local auction houses in China, combined with the lack of a tiered gallery system, also tends to drive up prices.

"In China, all the contemporary artists are trying to get on the elite list, to move to Beijing because that’s the main source of demand. They want to get rich fast, instead of developing a local scene gradually. And now every single province is going to hold art auctions for contemporary art. It produces a pricing war." For collectors and investors, this combination of opacity, unpredictability and greed is a strong deterrent.

Better information

But even given these disadvantages, for those considering buying Chinese art, now might be the time.  

The greatest challenges for buyers – the credibility and information gaps – look to be slowly resolving. Not only is domestic curatorial capability being upgraded, but other forms of coverage are also increasing. For example, last month Louise Blouin Media, owner of Artinfo.com, a website covering artists and art markets, announced plans to partner with Yahoo to provide content for the company’s China’s art channel.

"We think there’s a ton of advertising opportunity and a lot of activity in the Chinese art world," said Brian Kroski, president of Artinfo. He added that the company is also in dialogue with online portals like Baidu.

According to Kroski, Artinfo has good reason to remain unbiased: Its ad-driven model will benefit so long as interest in Chinese art remains high, regardless of valuations, but it needs credibility to differentiate itself from the pool of corruptible domestic competitors.

Prices are likely to carry on rising as mainland buyers become more interested in buying art. Data from Christie’s shows that mainland Chinese participation in auctions for Chinese art went up 94% year-on-year in 2009. More than one-fifth of the bidders at its fall auction hailed from the mainland. Although mainland buyers still tend to prefer traditional Chinese calligraphy and antiques, anecdotal data suggests a change is underway.

Part of this can be attributed to national pride in the internationalization of Chinese contemporary art, and part to the "Westernization" of the Chinese experience. But Lin also argued that structural changes to Chinese interior design are changing in preferences.

"Traditional Chinese interior architecture had high ceilings and the vertical panels hanging from the ceiling; scrolls really go well with that sort of interior space. But now everything is standard Western 8-foot high ceilings with white walls; it’s more horizontal than vertical." Such spaces present shorter, wider Western-style paintings better than scrolls, he said.

Selling for a bargain?

Another justification for continued price growth is that Chinese contemporary art is still relatively undervalued, critically and commercially.

For one thing, almost all the barbs directed at Chinese contemporary artists apply to their Western peers. Mass-produced art is hardly a new phenomenon – in the 17th century, Rembrandt and Rubens churned out works produced by employees and signed by the artists. In the 1960s, Andy Warhol called his studio "The Factory," and ran it as such.

Accusations of ideological shallowness are also double-edged. In China, the art education system mandates a high level of technical skill; one must pass three to four days of grueling practical technique tests before being admitted. In the West, some contemporary artists put more effort into their manifestos than their art: Hectoring the bourgeoisie is easier than painting a still life.

"I think you have to put it into context of the larger transition of the art world, which has gotten much more global, more interconnected, and with the internet, much more accessible," said Dudek of Christie’s. "Living Western artists are selling for US$20-40 million and Chinese artists are selling for US$1-2 million. So you can argue that Chinese artists are undervalued, if the world is flat."