Artlog

Realization

After years of unprecedented growth upon entering the world scene, the “red hot” Chinese contemporary art market is stabilizing, maturing and finding its equilibrium. At Sotheby’s latest sales results, in New York (Contemporary Art Asia, September 17th) and Hong Kong (Modern and Contemporary Asian art evening sale, October 4th; Contemporary Chinese Art, October 5th), prices are not skyrocketing anymore; the previous breathtaking price advances are being replaced by more lucid bidding brought on by a market looking for value and quality. Some masterpieces and lesser works went unsold or barely reached the lower estimates but high attendance at the Hong Kong sale and the presence of promising young artists speak for optimism. Indeed, despite the global financial turmoil, contemporary Chinese artists are still fetching fairly high prices given the financial markets’ slowdown.

Artworks cannot be compared to bonds, each is unique and its aesthetic appeal and art historical importance are the keys to its value. Upon discovery of this enticing Chinese art market, the one most rapidly increasing in value, the quality of the artwork was not always taken into consideration. As a result, many collectors and speculators entered the market at the same time. As the supply could not meet the demand, prices went up all across the board and in the general euphoria lesser works became vastly overvalued. Now that the contemporary Chinese art market is going through a more analytical process, not all artists can hold nor reach such high prices.

In terms of expectations, a broader look at the contemporary Chinese art market reveals that these top end artists, such as Zhang Xiaogang, Zheng Fanzhi, Yue Minjun etc. are still doing very well and holding their market value, especially works from the 90’s which are now widely recognized as more desirable. Last year Zhang Xiaogang was one of the hottest living artists in the global auction market, just behind such celebrated figures as Damien Hirst. Along with Yue Minjun and Zeng Fanzhi, Zhang Xiaogang made it to the coveted list of the global top 10 bestsellers at auction. Such records matter in the long run and will strike a balance with the most recent ones, influenced by the current economic downturn. However, the prices of the expensive second tier of the market, where artists such as Feng Zhengjie, Qi Zhilong, Tang Zhigang, Yin Zhaoyan used to fetch between US$ 250 000 and US$ 450 000, could come down very quickly. Newcomers keep the contemporary Chinese art scene vibrant. Regardless of market hesitations, there are plenty of young artists who represent fabulous value like Han Yajuan, Tu Hongtao, Wang Ke, Chen Ke etc.

The debate over artificial inflation and speculation triggered by sales is still alive but as the economy slows down in the West this now applies more to Asian buyers. The new distribution of global wealth and the subsequent growing number of Chinese buyers fosters optimism. The choice made by Sotheby’s to no longer hold Chinese contemporary art auctions in New York but to have them all in Hong Kong acknowledges the rise of this audience. Prestigious New York based galleries, such as Pace Wilderstein(Beijing, 798 art district) and James Cohan (Shanghai, French concession), opened branches in China this summer. Art fairs, such as SHcontemporary in Shanghai or CIGE in Beijing, and auction houses, like China Guardian or Poly International Auction in Beijing, are flourishing (even if , according to participants, SHcontemporary failed this year to reach galleries sales expectations). In its own country, the Chinese art market has become internationalized and these galleries and fairs are aiming at local and international collectors. All the more as the international financial turmoil does not seem to affect the Chinese buyers despite a 60% fall in the value of their stock market this year.

Chinese contemporary art has shown its potential for rapid appreciation in the past and despite recent auctions results still has room for appreciation of a slower, more reasonable type. Indeed, as far as pieces by the great masters (Zhang Xiaogang, Zheng Fanzhi, Yue Minjun etc.) are concerned Chinese artworks are not yet fetching the extremely high prices that works by famous western artists are, as illustrated by Damien Hirst’s recent auction which raised about 200 million dollars. Young Chinese artists still represent huge value.

The Chinese market has incredible depth and young artists like Hang Yajuan, Tu Hongtao and Wang Ke are soon to become leaders of their new generation and will soon challenge the prices reached by the new superstars.