Speculation inflates Chinese contemporary art prices
13.05.2006 NEW YORK.
By Jonathan Napack and Charmaine Picard
Yue Minjun, Lions, 1998, sold to an anonymous bidder for $564,800
The inaugural sale of contemporary Asian art at Sotheby’s in New York, which took place last month as part of Asia Week, saw ferocious bidding and a final total more than 50% higher than the upper estimate.
Although the auction included work by Japanese and Korean artists, the real focus was Chinese painting, one of the fastest growing segments of the contemporary art market. The sale brought in $13.2m, well above the auction’s upper estimate of $8m, and set new auction records for 20 artists.
Many collectors from mainland China came to the sale, several at Sotheby’s for the first time. But most of the bidders in the room were New York dealers. An exception was a Chinese bidder, resident in Singapore, who purchased the day’s top lot: $979,200 for Zhang Xiaogang’s Bloodline Series: Comrade No. 120, 1998, more than doubling the pre-sale estimate of $350,000 and beating 11 other bidders.
Two smaller portraits by Zhang also drew energetic bidding. Zhang’s Bloodline Series: Comrade No. 4 (Yellow), 1998, sold to a telephone bidder for $419,000. Zhang’s Sailor (Girl), 2004, later went for $486,400 to a private New York dealer, more than four times its upper estimate of $110,000.
Yue Minjun’s painting Lions, 1998, depicting five grinning figures crouched on marble pedestals, sold to an anonymous bidder for $564,800. Michael Goedhuis, a longtime dealer of Chinese antiquities who recently entered the contemporary market, purchased Xu Bing’s mixed-media installation The Living World, 2001, for $408,000, setting a record for the artist at auction.
A week later, on 8 April, Sotheby’s held its third sale of Chinese contemporary art in Hong Kong, with equally good results: the sale total was HK$132 million ($17m). Bidding was fierce, but with a larger Asian contingent.
Many of the top lots—such as San Yu’s Pink Lotus (est HK$5m-7m) painted in the 1940s—came from the early years of Chinese modern painting, which is little known to international collectors but is highly sought after by Taiwanese and Indonesian Chinese (most of whom keep their collections in Singapore). It sold for HK$28m ($3.6m).
“It’s becoming difficult to find anything,” said one Shanghai dealer. “People are coming from overseas with long shopping lists and leaving empty-handed.” Many believe that works have been deliberately withdrawn from sale in order to push prices up, at least until after these auctions. Buying seemed at times indiscriminate, with marginal works by artists with famous names going for several times their estimates. “It was exactly like this in the 1980s in Japan,” said a director of Sotheby’s. “People don’t even know what they’re buying. Or care.” A Hong Kong conservator said many pieces had severe conservation problems: “Last year there was a Yue Minjun that looked like it was about to fall apart. I hope buyers are actually inspecting these pictures.”
The most pressing issue is that these auctions do not constitute a true secondary market, since the overwhelming majority of pieces were consigned directly by the artists. Yue Minjun sat in the front row in New York while prices for his work soared. There are unconfirmed reports that artists have bid up the prices of their own works in previous Hong Kong sales.
Nonetheless, most analysts attribute the rise in prices to speculative buyers from mainland China, where an under-regulated, cash-based financial system encourages wealthy people to seek easily portable vehicles for their investments. But the biggest market for Chinese art is still the US, with the Taiwanese dominating the Asian contingent. According to Sotheby’s Chinese contemporary art head Zhang Xiaoming, more than 50% of the buyers in New York were American. She added that 43% were new to Sotheby’s, testifying to the dynamism of this young market.