Chinese Contemporary Art today



Over the last five years, Asian and particularly Chinese art has been one of the most dynamic segments on the secondary art market. Alongside the discovery and value appreciation of artists now recognised as the leading lights of Asian art, the phenomenal success of Chinese art at auctions as of 2004 generated wild expectations amongst artists from the region and prompted speculators and investment funds to snap up works by unknown signatures in the hope of riding the next auction rocket. Indeed, speculation on Chinese signatures and the astonishing auction results subsequently generated largely contributed to the growth of contemporary art’s share in the global art market (in the over-$100,000 segment, contemporary art’s share grew from 7.5% in 2004 to 19.7% in 2008).

In fact, from a value perspective, contemporary Chinese art offered some extraordinary gains with an overall increase in its price index of 500% over the same 4-year period. As demand grew, so did supply, pushing the prices of works by contemporary Chinese artists up to the same levels as those of the most expensive British, American, German and Indian artists: in 2002, there was only one Chinese artist in the global TOP 100 (ranked by auction revenue); today there are 34 compared with just 20 American artists.
Apart from Chinese artists, there are today a number of Thai, Indonesian, Indian and Korean signatures attracting bids on a par with Western art prices. In fact Asian artists are becoming the dominant element on the global contemporary art market; there are 44 in our latest Top 100 versus 27 Europeans. Moreover, for the first time ever, the total auction revenue generated from contemporary art in Asia actually exceeded the equivalent total in the United States (€130m vs. €123m) over a 12-month period (July 2008 – June 2009). Having generated €95m from contemporary art in the same period, China held on to its third place in the global geographical art auction revenue ranking.

Since its membership of the WTO, China has authorised the establishment of foreign auction houses like Christie’s, Sotheby’s and Bonhams who have all opened shop in Hong Kong, and Artcurial in Shanghai (for a single sale in January 2008). In 2007, the boost that these moves gave to the local market coupled with the dynamism of the Chinese auction houses and the financial strength of Hong Kong and Shanghai gave China third place on the overall global art market behind the United States and the UK. In the absence of new growth drivers to fuel its market, France looks unable to compete with its new Eastern rival!

A year ago, the impact of the global economic crisis on the art market was first felt in Hong Kong, before hitting sales in New York and the rest of the world. Christie’s and Sotheby’s held their Hong Kong sales of Modern and Contemporary Asian Art in October and November 2008. The bought-in rates, usually between 9% and 14%, shot up to 35%. On 30 November 2008, Christie’s sale of Asian art was a fiasco with 44% of the lots bought in.China’s auction revenue from contemporary art during the July 2008 – June 2009 was down 63% (to €95m) compared with the previous 12-month period (€259m) and the price index for contemporary Chinese art contracted by almost 38%.
Hence the keen attention focused on the results of Sotheby’s Hong Kong sale earlier this month which provided a strong indicator of the health of the market ahead of Christie’s sale next month (29 and 30 November 2009, Hong Kong).

On the 6 October Sotheby’s held three sales of Asian art (20th Century Chinese Art, Modern and Contemporary Southeast Asian Paintings and Contemporary Asian Art) offering more than 380 works by Chinese, Japanese, Indian, Indonesian and Korean artists with a total revenue estimate of close to $25m. With a final result of $28m, Sotheby’s was not disappointed. The total was $5m below the sum generated by the same sales a year earlier (4 – 6 October 2008), but the unsold rate improved from 30% last year to 23%.

The success of the recent sales was partly due to more reasonable price estimates. Among the habitual star signatures, ZHANG Xiaogang fetched the highest bid at HKD1.5m (c. $907,000) for a diptych entitled Comrade (6 October 2009). However, although that sale produced a result above its high estimate, it does not mean that the market indicators are back in the green. It simply demonstrates that demand is still buoyant at more reasonable price levels and that the auction houses have adjusted their price ranges. Before the crisis, Zhang Xiaogang regularly generated 7-figure (USD) results: in 2008 there were 12; in 2009 there has not been one!
Likewise for YUE Minjun’s Hats Series – The Lovers which generated HKD5.3m ($683,700) pulverising its high estimate of HKD3.5m. In 2007 a similar work fetched 30% more: on 30 November 2007, his « Hands up, dont’s move! » created in the same year (2004) as Hats Series – The Lovers in the same dimensions and also depicting two laughing clones, fetched ¥8m ($1m) at Poly International Auction Co.

Returning to the recent Sotheby’s sale, a work entitled Drawing for Spider Wed by CAI Guoqiang – the artist responsible for orchestrating the fireworks display at the Peking Olympic Games and at China’s recent 60th anniversary of the communist regime – sold at its low estimate for the equivalent of $335,400. But his best work at the sale, a 3 x 6 metre masterpiece estimated at between $606,000 and $710,000 failed to find a buyer.

With the speculative era dead and gone, the market has become distinctly more affordable around the world and particularly in China: in the first half of 2008, the average price of contemporary works sold in China was $65,500. In the first half of 2009, this average fell to $26,800.