Thursday, February 27, 2014

How China is Quietly Changing the Balance of Power in the Art World

Market headlines about whether China is number one, two or three in global auction sales may only be the tip of the iceberg of what is in the making. Looking at its auction houses, private museums, and collectors, one may picture a very different landscape in the art world – in the not too distant future.
by Alexandre Errera (source, Forbes)


Last week, Poly Culture Group Corporation, part of the $61bn state-run empire Poly Group, and owner of Beijing Poly International Auction, the world’s third largest auction house, announced that it is filing for an initial public offering. The news did not provoke much fuss in the West, maybe because of the modest size of the IPO ($330 million), but it is indicative of its ambitions to grow global and should not be ignored.

Even more interesting is what its Chief Executive, Jiang Yingchun, said during the press conference: “we are big in the art auction market in mainland China but we still have a long way to go to become the biggest auction house worldwide”. A modest statement, that some could actually read as the proof of its goal to become largest auction house in the world, and soon. With nearly $1bn dollar in sales in 2012, Poly is still far away from Christie’s or Sotheby’s, but it was only launched 8 years ago, compared to the Western houses’ 250 year history. One could argue it might be only a question of time until we see an auction of Poly or Guardian (the other major Chinese auction house), in New York or London.

Xing Junqin

Looking at the rise of private museums in China is also quite telling. In 2012, about one museum per day was opened in China; in 2013, this number rose to 451, and 2014 is set for a new record. China’s goal was to have 3,500 museums by 2015 – it now has about 4,000.

Realistically, many won’t survive, and most will be  showing only local art. However, what has emerged recently is that some will focus on Western art, and with serious money behind it. One example is the Yuan Museum, of Chinese artist and super star Zeng Fanzhi, aiming to focus on the “pedagogical presentation of Western art”.

With public funding for art institutions in the West decreasing, the number of art patrons diminishing (especially in Europe), Chinese museums have a card to play. These new institutions will not challenge the giants of the West such as the MoMA, Tate Modern or Pompidou but they will help to pin China as a global cultural hub.  It might not be unrealistic to have to go to Beijing or Shanghai to view a Bacon or Picasso show. As the museum industry is undergoing systemic changes, if China plays it right, it will have a powerful seat at the table.

Finally, the fact that Chinese collectors, known for mostly collecting Chinese art, are beginning to buy important Western artworks is noteworthy. If we make a parallel with the auctions houses exponential growth, it is not far stretched to say that they might soon become major players in that field too. In recent auctions, Chinese collectors have been buying works from Rembrandt Van Gogh, Monet and Picasso. Some, such as Guo Qingxiang, the art advisor of the richest man in China, Wang Jianlin, even believe that “prices in the Western art market are relatively inexpensive now, so it is a good buying opportunity”. This might sound astonishing in the light of the recent record auction results, but it is a very important statement.

Chen Wenling

With the number of billionaires on the rise in China (358 vs. 481 in the US), the increasing percentage of them looking at art, it might mean that they will have a much more important role in setting prices, along with the usual Western art moguls.

Looking at how quickly China’s place in the art market has grown over the past ten years, one should not expect that we have seen it all. China is now in a second phase of shaping its position in the art market world. Its increasing power may well come from a variety of subtle changes, and not only by the sheer power of auction sales number. This should not be seen as a surprise, given China’s 5000 year rich history, nor should it be necessarily considered as a threat. It is a challenge the traditional players in the art world will have to address soon, in order to discover what is underneath the tip of the iceberg.

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