A Word of Caution

The Chinese art phenomenon continues, and shows no signs of abating despite all of the economic problems. Once relegated to the underground, Chinese contemporary art has hit the mainstream in a big way ever since it began raking in untold billions. At the various gatherings of artists, critics, dealers and hangers-on recently I’ve seen nothing but optimism and enthusiasm, with everyone waiting expectantly for the next big thing to explode on the scene. Sotheby’s and Christies (not to mention Poly, Guardian and a host of new mainland upstarts) are gearing up for ambitious spring offerings, and no one seems phased by the financial meltdown at all.

I don’t see any big surprises happening this season, but I am seeing good reason to be cautious over the coming months. Having just walked away from a speculation bubble in the tea market, I may be a little biased, but more than a few art insiders have been expressing a lot of curiosity about that bubble recently, so maybe we’re on to something.

The first issue is that the market has gotten too big, too fast. Though I think that a good Zhang Xiaogang painting is worth every penny of $1-2 mil, I’m seeing way too many artists in the upper mid-range, selling at tens to hundreds of thousands. I think that Chinese artists are producing some of the best art in the world right now, but I have a little trouble swallowing the idea that hundreds of Chinese artists are going to make it into the world art history books and make their mark on the emerging global aesthetic. The prices now would reflect the expectation that each and every one of those guys will be the next Basquiat.

Much of the buying and selling I’m seeing seems to be focused on potential future value, with artworks treated as financial tools rather than objects of desire. It’s easy to fall in this trap when a work that was sold by a starving artist for a few hundred dollars in the eighties is now hitting the auction block for hundreds of thousands. Puer tea traders fell in the same trap when they saw the ’88 Qing vintage start at thirty cents and top off at 1500. The bottom fell out of that market when everyone realized that there was too much production and speculators outnumbered drinkers by several orders of magnitude.

I could go on and on about this, but to make a long story short, approach Chinese art with caution. If you’re entering into the market strictly to cash in, you’re likely to get burned, sometime soon. Having said that, if you’re in it for the art, a careful approach should reward you with some great stuff for your collection.

A slightly clumsy English version of Zhu Qi’s article is available here

The original article is available on Zhu Qi's Blog