An Art Market Bubble Chinese Style Pt. 1 – artmarketblog.com
There can be no doubt that the global art market is currently experiencing a period of increased confidence and positive sentiment that is being defined and driven by an influx of wealthy Chinese buyers who are not only having a significant influence on the western art market, but are also propelling the Chinese art market to new heights at an alarmingly rapid rate. But, then you probably already new this unless you have been living on another planet for the last twelve months. Because any competent journalist could combine the results of recent art auctions with the rise of the Chinese art market to the top of the global art market charts and come to the conclusion that there is a Chinese art market boom, there have been plenty of reports along such lines.
The problem as I see it is that a majority of mainstream journalists report what they see and take what they see at face value. This means that a lot of what is written about the art market is pure reportage of current events that does not take into account past events or what is happening “behind the scenes”. As such, many of the conclusions that are reached regarding the progress of the art market are seriously flawed, which is why I write this blog and why lots of journalists come to me for my opinion before reporting on art market events. Please note that I am not suggesting that journalists are not doing their job properly, or are somehow at fault, because their job is to report on current events – and that is what they are doing. Since a majority of journalists are not art market experts one cannot expect them to have the sort of specialist knowledge or experience that is required to make accurate predictions about the art market.
One of the biggest mistake most people make when it comes to analysing the art market is failing to recognise and acknowledge the difference between a short term bubble and a sustainable long-term trend. To be able to distinguish between the two is no easy task and requires an in depth knowledge of the history of the art market and the mechanics of the art market as well as a good understanding of what outside factors influence the art market. However, with adequate knowledge and research it is possible to make accurate predictions as I have proven in the past. When it comes to the Chinese art market there are many factors that indicate a short term art market bubble as opposed to a long-term sustainable trend. In a previous post titled ‘Is the Chinese Art Market Doomed?’ I looked at some of the reasons I believe that the Chinese art market boom is not sustainable. With this series of posts I would like to continue this topic and offer some more insights into the current progression of the art market with a focus on China.
With one of the world’s fastest growing economies and a burgeoning middle class it is no surprise that the Chinese are madly spending huge amounts of money on antiques and fine art – prime symbols of wealth for the status obsessed Chinese. It is also no surprise that the emergence of Chinese buyers as a dominant force at auctions of both Western and Chinese antiques and fine art has sparked a plethora of reports and predictions that China is on the way to becoming the centre of the global art market. This would be an interesting and perhaps even positive development for the global art market if it weren’t for that fact that serious cracks are already beginning to appear in what one could be forgiven for thinking is an Eastern based art market renaissance.
What concerns me most about the Chinese art market is the fact that the Chinese are not only showing a keen interest in the work of modern master “trophy” artists, just as the Japanese did, but unlike the Japanese are also showing a keen interest in the work of their own young contemporary artists. The first reason that this is concerning is the obvious issue of inflated pricing that arises when uneducated and indiscriminate buying of “trophy” works takes place – especially when the reasons for purchases are related to status, vanity and games of one-upmanship. The second reason that this is concerning is that China does not have the sort of private gallery infrastructure in place that is needed to support young contemporary artists and nurture their careers over the long term. Without the private gallery step in the process of natural progression, young artists end up being thrust into the limelight ill-prepared and without having been through that crucial process of critical review that the private gallery system is a major part of. It is that private gallery system that would usually separate the true stars from the posers and direct the marketplace towards the true stars. Artist’s whose work is taken directly from the art school to the auction house are essentially being thrust into a position of authority and responsibility without the proper credentials. This is fine while the going is good but as soon as the money runs out and these artists are asked to prove their worth the whole foundation that their career has been built on comes tumbling down.
As I have mentioned many times before, the long term value of an artist’s work depends on the level of support and patronage that they receive from the cultural and private gallery sectors. It is pretty much inevitable that the super-heated Chinese art market will begin to cool at some point in the near future which means that buyers will have to begin to justify their purchases and the amount of money they are spending on fine art. If an artist has not been through the traditional route of progression, and does not have the support of a strong private gallery sector, it is unlikely that they would be able to survive the justification process.
To be continued………….
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications
- An Art Market Bubble Chinese Style Pt. 3 – artmarketblog.com
- Poly Auction Identify Li Keran Record as Growth Signal – artmarketblog.com
- Exposing the Chinese Art Market With 6 Questions Pt. 3 – artmarketblog.com
- Exposing the Chinese Art Market With 6 Questions Pt. 1 – artmarketblog.com
- An Art Market Bubble Chinese Style Pt. 2 – artmarketblog.com