Andrew James
Art and Shine Art Space are interviewed for Shanghai Star business
newspaper.
Modern
Art meets the bottom line.
A growing wave of profit-driven investors is driving a
speculative bubble in contemporary Chinese art. But, as Chi-Chi Zhang
discovers, a younger generation exhibiting a better balance of aesthetics
and financial realism is poised to help create a more sustainable market
for modern art.
"Now
this, I'd like to own, said Katherine Li, a 36 year-old interior designer
fom Shanghai, as she headed toward a Xue Jiye oil painting near the back
if the Art Scene Gallery in Shanghai's famed Moganshan Road creative complex.
Although the gallery features contemporary art fom relatively new local
talent, these prices can carry a hefty price tag. Xue's "Human Struggle"
a stunning depiction of masses of bodies, sells for about 142,000 yuan
(USD$19,880), a valuation that draws a stunned reaction from many visitors.
Li admires, but moves on.
" Like most buyers in China, I began collecting seriously after I
realized the investment potential" said Li, who also works as a part-time
consultant and helps clients line their walls with attractive and potentially
valuable artworks. "ofcourse, unlike some investors, if I truly love
a painting, I will never part with it."
With more wealthy Chinese investing in contemporary art, Li's business
is booming. In 2007, her clients from across the mainland bought more
than 5.5 million yuan worth of contemporary art. Even friends and family
members have approached her for advice.
The surge in China's contemporary art market has definitely picked up
pace since 2001, according to Li and other experts. Sales values are the
latest contemporary art auctions in Hong Kong for instance, more than
tripled from a year earlier, according to Sotheby's Holdings INC. The
painting "Execution," by the highly bankable Yue Minjun, set
a record late last year as the priciest Chinese painting when it sold
for US$6 million.
" Chinese people are beginning to realize that contemporary art is
a symbol for forward thinking, as well as a status symbol," said
Andrew James, owner of the Shanghai based Andrew James Art Gallery. "And
with more disposable income, they are also looking for ways to maximize
their savings."
As wealthy investors in Hong Kong and Taiwan steadily increased their
collections, people on the Chinese mainland have followed suit, according
to Vivien Ip, who serves upscale clients in Hong Kong and Thailand.
I've seen contemporary Chinese art steadily gain popularity in the past
year with my Hong Kong clients," said Ip, who is based in that city.
"But our clients in the Chinese mainland have observed these paintings
appreciate fifty-fold and want to get in on the action.
As a result of the demand, contemporary galleries in China are sporting
a new perspective in their marketing approach. More renowned galleries,
like Beijing Art Now, are expanding to Shanghai and other cities. And
local galleries such as Wujiaochang 800 Art Space, Outstanding Art and
Shine Art Space have expanded beyond a single location into Shanghai's
booming new art communities in Yangpu and Hongkou districts: Wujiaochang
and 1933 complex on the North Bund.
The galleries are gearing up to take advantage of the international and
local wealth flooding into China as a result of a booming economy, according
to Monica Wu, manager of Shine Art Space in the Moganshan area along Suzhou
Creek.
" As Chinese people become more affluent, they're not collecting
European art, they are going straight for their own," Wu said. "It's
an issue of cultural pride and investing in their own heritage."
But in China, where quick returns are expected, art may not be the best
way to quickly enhance the bottom line "at least at present. In fact,
many Chinese buyers have unrealistic expectations for short-term gains,"
said Xhing Yuchen, a Shanghai-based art consultant.
Price Bubble
And much like those involved in the volatile stock and real estate markets,
most buyers are neither buying for personal pleasure nor aesthetics and
will part with their yuan only if convinced a painting will triple in
a year or two, experts said.
When he came to China in 2005 gallery owner James bought for his personal
collection a piece by Han Yajuan, a relatively new contemporary artis,
because he admired it. James paid US$1,000 for the painting, never imaging
it could sell overseas for US$25,000 only two years later.
Such rapid appreciation is creating a price bubble, experts said. As market
speculation causes a spike in auction prices, serious collectors have
been warned to wait until things cool off.
What many gallery owners hope to do is slowly change the way locals perceive
a work of contemporary Chinese art. They're hoping to open the eyes of
potential buyers to their own cultural heritage, including modern art.
" I want locals to understand as I tell all my clients, even if they
are pure investors to buy for the sake of loving the piece," James
said. "It's such buyers who remain the happiest, even decades later,
regardless of the value of the painting."
The good news is that the gallery owners like Wu predict 2008 could be
the defining year for China's contemporary market to adjust itself, providing
a catalyst for genuine collectors.
"After the market cools, more collectors will surface, and we'll
begin to see an adjustment in the market," Wu said. "No longer
will paintings sell for six times their predicted value or appreciate
30 times in three years."
Within the next decade, experts also predict a growing base of young art
collectors in the 30 to 40 age group, who like Li, have either inherited
money or made it big on their own.
"Art collectors will be much younger in China as opposed to those
in Western countries, which fall into the 50-60 age group," said
James, who moved his gallery from London to Shanghai two years ago to
take advantage of the local market"s potential. "This generation
in China "people educated or who have worked abroad "are the
ones who appreciate are not just as a monetary investment but truly love
the work itself."
As China's economy continues to expand, investors and gallery owners like
James are optimistic about the art market. Their main concern is finding
enough quality talent to meet the hungry demand of buyers eagerly waiting
for the arrival of the next Zhang Xiaogang.
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