The Chinese Art Market

Jane sent me an interesting link from the NY Times on an in-depth look at the Chinese art market and it is not pretty. The article touches on non payment by mainland Chinese collectors, misrepresentation of sales from Chinese auction houses as well as fakes and forgeries.  Sort of the trifecta of manipulating the art market. The title of the article really sums up the perspective being given bu the authors, Forging an Art Market.

Read the article and you will look differently on the Chinese art market.

The NY Times reports

Indeed, even as the art world marvels at China’s booming market, a six-month review by The New York Times found that many of the sales — transactions reported to have produced as much as a third of the country’s auction revenue in recent years — did not actually take place.

Just as problematic, the market is flooded with forgeries, often mass-produced, and has become a breeding ground for corruption, as business executives curry favor with officials by bribing them with art.

Fraud is certainly no stranger to the international art world, but experts warn that the market here is particularly vulnerable because, like many industries in China, it has expanded too fast for regulators to keep pace.

In fact, few areas of business offer as revealing a view of this socialist society’s lurch toward capitalism as the art market. Like many luxury businesses in China, the explosion of buyers for art here has been fueled by the pent-up consumerism of the newly rich. The demand is so great that last year, in a country that barely had an art market two decades ago, reported auction revenues were up 900 percent over 2003 — to $8.9 billion. (The United States auction market for 2012 was $8.1 billion.)

While the luxury-buying habits in China often mimic those in the West, the demand for art reflects uniquely Chinese tastes. While the rest of the world bids up Pollocks and Rothkos, Chinese buyers typically pursue traditional Chinese pieces, some by 15th-century masters, and others by modern artists, like Zhang Daqian, one of many who have chosen to work in that old style.

This very reverence for the cultural past is now contributing greatly to the surge in forgeries. Artists here are trained to imitate the old Chinese masters, and they routinely produce high-quality copies of paintings and other works, such as ceramics and jade artifacts. That tradition has intersected with the newly lucrative art market, in which reproductions that so many have the skills to create are often offered as the real thing. It would be hard to create a more fertile environment for the proliferation of fakes.

“This is the challenge right now,” said Wang Yannan, the president and director of China Guardian, the nation’s second-biggest auction house. “In the mind of every Chinese, the first question is whether it’s fake.”

For years, much of the forgery went unnoticed as works passed from buyer to buyer, their prices spiraling up. But, increasingly, high-profile scandals are exposing the extent of the fakery and sowing doubts about the larger market. In one case, three years ago, an oil painting attributed to the 20th-century artist Xu Beihong, which sold at auction for more than $10 million, turned out to have been produced 30 years after the artist’s death by a student during a class exercise at one of China’s leading arts academies.

Even more embarrassing was the government’s decision last July to close a private museum in Hebei because of suspicions that nearly everything in it — all 40,000 artifacts, including a Tang dynasty porcelain vase — were fake.

“There’s always been forgers on the market, but it’s a matter of proportion,” said Robert D. Mowry, a former curator of Asian art at Harvard who is now a consultant for Christie’s.

Concern about fraud and a cooling economy seem to have tempered enthusiasm in the Chinese art market. After peaking in 2011, reported revenues dropped off 24 percent last year, according to Arts Economics, a research company that studies the international market. This year is expected to be modestly better than 2012.

The Chinese auction industry and the government have taken notice, and say they are looking to clean up the abuses and stem further damage to consumer confidence, especially since the art market is actually perceived by many as one of the safer places to invest.

“A majority of Chinese people do not trust the Chinese stock market,” said Melanie Ouyang Lum, a consultant on Chinese art. “The housing boom has slowed tremendously. A lot of people are looking to art for investment.”

In fact, Zhang Daqian, a 20th-century artist known for his landscapes, is one of several Chinese painters who have joined Picasso and Warhol as the best-selling artists in the world even though their names hardly register outside collecting circles.

Source: The NY Times