The State of the Market for Chinese Art | BLOUIN ARTINFO
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The State of the Market for Chinese Art

Swiss businessman Uli Sigg (left) with his double created by Ai Weiwei, titled "Uli Sigg (Newspaper Reader)," 2004, mixed media, 108 X 58 X 72 cm. Sigg is one of the most important collectors of Chinese art. He donated 1,510 pieces of Chinese Contemporary art in his collection to Hong Kong’s M+ Museum in 2012
(©Sigg collection )

In December 2017, a group of ink-brush panels titled “Twelve Landscape Screens,” painted in 1925 by the Chinese artist Qi Baishi, sold for $140.8 million. The sale at Poly Beijing made Qi (1864-1957) the first Chinese artist to break the fabled $100 million barrier at auction. In doing so, the self taught, barely-schooled son of Hunan peasants gatecrashed a club that was previously the exclusive preserve of some of the greats of Western art, the likes of Picasso, Warhol, Klimt, Cézanne, van Gogh and Modigliani.

For close watchers of the auction there were indications that something was in the offing — Qi had form: in 2011 his “Eagle Standing on Pine Tree” was sold for $65.5 million (even if the bidder later raised doubts as to its authenticity — possibly as a ruse, successful as it turned out, to avoid paying), and another of his works fetched $28 million in 2016. This, despite Qi being a sometimes problematical figure. His long-standing popularity in China has proved too much of a temptation for some forgers: scholarly estimates suggest that the artist painted somewhere between 8,000 and 15,000 works — of which at least 3,000 are in museums — yet over the past 25 years no fewer than 18,000 works attributed to him have been sold at auction.

No doubts were attached to “Twelve Landscape Screens,” however, and the work is not only in excellent condition but came with a rock-solid provenance, which is why the buyer was content to face down what was described by one commentator present as “frenetic” bidding and go so high. What is particularly interesting about the sale is that Qi is an artist little known in the West and although his works have realized a great deal of money over the years (some 5,000 of his works were sold between 2006 and 2016, fetching $1.45 billion), the recent sale puts him on a new level. He is now not just a big hitter but the big hitter of Modern Chinese art. As with Leonardo’s “Salvator Mundi,” it is impossible to know whether the sale marks a long term shift but it certainly shows a previously unsuspected level of confidence in Chinese painting.

The Chinese market is a curiosity in that it is largely self-contained: the vast majority of Chinese artworks are bought and sold within the country itself rather than internationally and the prevailing taste is predominantly for painting and calligraphy, which account for 80 percent of the market (although the antiquities market is also buoyant: six of the top 10 most expensive antiquities sold in Europe in 2016 were Chinese works).

The name of the new owner of “Twelve Landscape Screens”is still unknown but every indication is that he or she is Chinese. Perhaps the real message of the sale is that the country’s collectors are now willing to look beyond buying Western trophy art — indeed imports of foreign art are down by around a fifth — and give native artists an equivalent level of money-backed respect. Qi’s $150 million is merely the most eye-catching of a series of stellar prices recently paid for Chinese paintings. In 2017, a watercolor titled “Willows and Geese” by the 11th-century landscapist Zhao Lingrang fetched more than $27 million, while the 13th-century artist Chen Rong’s “Six Dragons” made $43.5 million in the same sale. In 2016 “Five Drunken Kings on Horses” by Ren Renfa (born 1254) was sold for $44 million. As far back as 2010, a calligraphy work by the 11th-century poet-scholar Huang Tingjian, “Di Zhi Ming,” made a fraction under $64 million and held the record for the most expensive Chinese work ever sold until Qi made such a sum seem positively modest. (All auction figures are from the Blouin Art Sales Index.) Nor are such sums simply the preserve of exceptionally rare and long-dead artists. For example, “The Goddess of Cloud and the God of Longevity” by Fu Baoshi, who died in 1965, made more than $35 million in 2016, while China’s most expensive living artist is Cui Ruzhuo, courtesy of his “The Grand Snowing Mountains” which reached $39 million in 2015. (This makes the mistake of the cleaners at a major Hong Kong hotel in 2014 who inadvertently threw away a just-purchased Cui painting, left in the room by its happy winning bidder, seem all the more egregious.)

The 10 most valuable Chinese artists 2006-2016 were almost all born in the 20th century and have earned huge sums at auction. Qi is not even top of the list; that honor goes to Zhang Daqian (1899-1983), whose works made more than $1.7 billion over that period. Behind Qi come ZaoWou-Ki (1921-2013) who earned some $830 million; Wu Guanzhong (1919-2010) with $780 million; and Xu Beihong (1895-1953) with $630 million. Even number 10 on the list, Lin Fengmian (1900-1991), accumulated sales of more than $350 million. In 2016, no fewer than six modern Chinese artists figured in the list of the top 20 highest grossing international artists by sales. These sort of sums are reflected in the growth and strength of the auction houses that cater for the Chinese market. The most important of them is the Beijing-based Poly International, which is now the world’s fifth most successful auction house by sales behind the long-established quartet of Christie’s, Sotheby’s, Phillips and Bonhams. Poly International still has a long way to go before equalling them but its trajectory is upwards. What will need to change first, though, is China’s widespread non-payment problem: in 2016 only 51 percent of buyers ended up actually paying for the work they nominally purchased, according to the Global Chinese Art Auction Market Report. But as the market continues to develop and return bidders and institutional buyers increase, this shockingly low figure should start to rise. Chinese auctioneers dominate, however: some 87 percent of Poly International’s $5billion-worth of sales of Asian art took place in China itself, with the remaining 13 percent happening in Hong Kong. The second most successful auction house in the country is China Guardian, and 100 percent of its $400 million sales took place in its homeland. The presence of Christie’s and Sotheby’s at numbers three and four on the list is due to the fact that 80 and 75 percent of their Asian art sales respectively took place in Hong Kong, with a mere fraction occurring in their traditional heartlands of Britain and the United States. Also on the scene is a cluster of auction houses largely unfamiliar in the West, including Xiling Yinshe, Beijing Council and Cheng Xuan Auctions.

Whether these institutions will seek to emulate the likes of Christie’s and Sotheby’s and expand internationally remains to be seen, but it is entirely possible. Poly International, for example, is a subsidiary of the state-owned China Poly Group Corporation and was established only in 2005 and its Hong Kong arm in 2014. Its growth has been remarkable and with the Chinese government not shy of overseas investment, establishing branches elsewhere around the globe looks likely.

What might well determine whether or not that happens is the development and consolidation over the next few years of what is essentially still a young market for Asian art. As recently as 2006 total sales were only around the $400 million mark and the trend has been largely — but not smoothly — upwards since then. Between 2009 and 2011 there was a huge leap in sales, to a peak of some $3.75 billion in 2011, then came a sharp readjustment (down to $2.15 billion in 2012) and subsequently a levelling out around the $2.5 billion mark. It is not beyond the realm of feasibility that China’s taste for Chinese art might yet prove unsustainable. Since 2006, that appetite has proved rather volatile when compared to other genres. In 2006, Asian art accounted for only around five percent of global total sales prices. By 2016 that figure had grown via various expansions and contractions to 25 percent.

Over the same period of time, however, Old Masters remained stable at roughly seven percent, as did postwar and Contemporary art at 25 to 30 percent. There is, in other words, a skittishness about Asian art that isn’t present with the more established auction fare. What seems to be happening now is that quality is beginning to dominate over quantity: the number of lots sold since 2012 has decreased from 375,000 to 275,000 but revenues have remained broadly the same. The Poly group has already started to try and diversify its home market by inducing a taste for high-quality Western art in its Chinese buyers. Early in 2017, for example, Poly Auctions Shanghai held a mixed auction with the ungainly title, “Dialogue: From Yuan Dynasty People Hunting in the Fall to Picasso — Important Eastern and Western Art.” As well as choice lots of Chinese art, it offered Picasso’s “Woman under the Light (Jacqueline)”, which sold for just shy of $9 million, as well as works by Gauguin, Monet and Morandi. The sale achieved a total of $89 million with the Western lots responsible for $30 million of that.

One person who exemplifies this greater breadth in Chinese taste is Liu Yiqian, the former taxi driver turned investor who with his wife Wang Wei has, over the past few years, built an eclectic collection that includes a Ming dynasty doucai chicken cup, for which he paid $36 million; a Tibetan embroidered silk tapestry ($45 million); a Song-era vase (nearly $15 million) and, famously, Modigliani’s “Nu Couchée” of 1917-18 for which he paid $170 million in 2015, using his credit card, and which was then the second most expensive painting ever sold at auction.

The couple show some 300 of their acquisitions at their own Long Museum in Shanghai, something that is becoming a feature among the richest and most committed new Chinese collectors. As well as Liu and Wang, various other Chinese collectors have caught the cross-over bug: in 2013 the real estate billionaire Wang Jianlin bought Picasso’s “Claude and Paloma” for more than $28 million; another real estate specialist, Joseph Lau, paid $17 million plus in 2006 for a large Andy Warhol screenprint of Chairman Mao; while the Hong Kong-based financier Alan Lau bought Warhol’s “Green Car Crash (1963)” in 2007 for $71.7 million (Lau is also a member of Tate’s Asia-Pacific Acquisition Committee).

The Poly group in particular is keen to encourage more of its clients to develop these collectors’ ecumenical tastes. The Chinese auction houses need innovative practices because their Western peers see not just plenty of riches in the Asian market but also plenty of potential for growth. Christie’s 2017 sales figures showed that their sales in Asia were up 7 percent for the year to $755 million, although this remains a fraction of their sales in the Americas ($3.2 billion, up 62 percent) and the Middle East ($2 billion, up 11 percent).

The figure was achieved on the back of a record-breaking Asian Art week in New York in March which raised $330 million; the Asian Art week in London in May and the designated Spring sales in Hong Kong. They also found, however, that buyers over the £1 million ($1.39 million) mark rose by a whopping 63 percent and online sales by 23 percent (bolstered by 15 specialist Asian art sales), so the auction house is well aware that there are new and untapped clients out there waiting to be tempted.

Christie’s figures also show the speed of change in the Asian art market. It was only in 2015 that Christie’s New York held its first-ever evening sale of Asian art — works belonging to the dealer-collector Robert Hatfield Ellsworth. The success of the evening seems to have taken even the auction house aback: it totalled $134 million with 23 lots fetching more than $1 million and four world records achieved. Here was proof, if it were needed, that the Asian market was a serious one. It was a lesson quickly learned; this spring Christie’s has no fewer than 13 separate Asian art sales in the offing. The consensus seems to be that while earlier Chinese collectors bought art largely for its investment potential, the new generation is driven by a serious engagement with the works themselves. Of course it is not just the Chinese themselves who are driving demand, there are various Western collectors with a long-standing interest in Asian art.

The Belgians Baron and Baroness Guy and Myriam Ullens de Schooten, for example, have an extensive collection of contemporary Chinese art and founded a non-profit art center in Beijing, the Ullens Center for Contemporary Art (UCCA) in which to show some of it. The Swiss businessman Uli Sigg amassed 1,510 pieces of Chinese art from the 1970s to the present before giving them to the Hong Kong M+ Museum. The collection of fellow Swiss Monique and Max Burger contains some 1,000 works by 300 artists. The Australians Kerr and Judith Neilson, meanwhile, show their 1,000-piece plus collection in their own White Rabbit Gallery in Sydney.

Such figures though are in the vast minority. What has been happening in China over the past few years is merely a modern incarnation of what happened in the Netherlands in the 17th century or Great Britain in the 18th and 19th centuries: a newly prosperous society powered by a burgeoning middle class has money to spend and decides to spend it in the time-honored way on art and finds that it is home-grown art that is the most available, the most comprehensible and the most relevant.

— This article appears in the March 2018 edition of Art+Auction