Published: October 14, 2015
NEW YORK CITY — With the results of the fall running of Asia Week declaring another successful round of selling for the auction galleries and dealers, the unspoken question now is: “How will the decline of the Chinese stock market impact the collector market for Asian art and antiques?” An analysis recently issued by Artnet and the China Association of Auctioneers is not as sanguine, showing that for calendar year 2014 the Chinese art and antiques market remains down sharply from its peak in 2011. The decline can be attributed to a number of factors, described more fully in the report, which is available at www.cn.artnet.com/en/chinese-art-auction-market-report.
Antiques and The Arts Weekly reached out to several Asian art experts and asked about what past results may indicate about the future returns in the Chinese art market. Participants include William Hanbury-Tenison, a Cambridge University-educated art historian who has lived and worked in China, Japan, Taiwan, Hong Kong, Vietnam and the United States where he was employed by Christie’s and the Pacific Asia Museum in Pasadena, Calif.; Kevin Bruneau, star of Market Warriors and an Asian art expert; Joseph Manqueros, recently of Wendt Galleries International, currently president of Junzi, a consultancy targeted to companies and cities looking to do business and invest in Asia, and an editor at Jetset magazine; Marley Rabstenek, specialist in charge of Asian works of art at Doyle; Lark Mason, founding director of iGavel Auctions and chairman of Asia Week New York; and Jim Callahan, vice president and director of Asian arts at Tremont Auctions.
According to artnet.com, the first two quarters of 2015 have seen a downturn in the global art market. Worldwide sales are off 6 percent, with China dropping by 30 percent. To what do you attribute the Chinese fall off? (It should be noted that art sales in the United States rose 19 percent during the same period.)
Bruneau: Like any market that explodes too fast, there is always a correction.
Hanbury-Tenison: Back in 2008, the Chinese art market stumbled following the economic crisis but then quickly recovered to achieve new speculative highs on the back of the massive liquidity that the Chinese government pumped into the economy to keep it growing. At the time, the press reported these prices as evidence of the resilience of the Chinese economy. Those of us closer to the market saw that the speculation was caused by easy money and was part of a huge orgy of luxury spending that was bound to, and indeed did, end in tears with the launch of the anticorruption campaign.
Manqueros: Other than the obvious manipulations to the auction sales, we have to factor in the inflated prices and the fact that many pieces were sold but never actually paid for. This had a huge impact on the overall figures. The year 2015 is a repositioning time where the market is normalizing. Ensuing years will show higher stability and, in my opinion, a return to the vibrant market.
Rabstenek: The many Chinese auction houses sell enormous amounts of property in a number of sales through the year. It could be a case of supply and demand, as much as being a reaction to any economic indicators.
Mason: The recent results of the Asian art sales this September in New York were encouraging. There were a number of outstanding prices achieved, including stunning results at Christie’s for a fine collection of furniture from Peter Lai, a well-respected, early collector and dealer in Chinese furniture. Overall, both Sotheby’s and Christie’s delivered solid results. The economic weakness in China was most keenly felt in the slight slump in number of attendees. Thankfully, those that came bid with gusto. There is no question that the lower and middle market is and will be weaker due to the economic problems in China, not just with stocks but also with real estate. Economic cycles come and go, and one of the unique characteristics of Chinese art is the breadth of the market. Unlike other areas, such as American furniture, which almost solely appeals to Americans, Chinese art has buyers in nearly every demographic segment. The diversification of buyers helps a lot, but Chinese dominance, particularly with mainland buyers, does present challenges.
Callahan: I would answer this by way of analogy. What was the first country to jump on the computer bandwagon? It was Japan. What then was the first national economy to tank? Japan again. I don’t think this is a coincidence. The biggest challenge facing the Chinese government is that computers have largely rendered jobs obsolete. The old adage “They’ll find another job” doesn’t apply. There are no other jobs. Unlike in the United States where there is no concern for social instability, the Chinese are keenly concerned and are trying to find a middle ground.
Are Chinese collectors still your main audience, or has the market opened up?
Bruneau: The Chinese were major players up until about a year ago. We now ship to less and less Chinese addresses and more American addresses.
Hanbury-Tenison: The vast overseas Chinese population have always collected. Furthermore, non-Chinese such as myself have taken an interest in Chinese porcelain and paintings since the Ming dynasty and we are not going to stop now, although we might hesitate to buy at current prices.
Manqueros: In terms of overall numbers, Europeans are stepping up in bigger numbers, but I attribute this to better education about the arts. The desire for Chinese art, both antiquities and contemporary, is still there, but many clients are waiting for the market to stabilize.
Rabstenek: Our buyers are mostly Chinese collectors and dealers.
Callahan: Chinese collectors are most certainly our main audience — and that’s because there are so many of them that any downturn has to be temporary. I would add that fakes and reproductions are also responsible for softening the market.
Mason: My two companies, Lark Mason Associates, the auction company, and iGavel Auctions, the auction site provider, both enjoy a wide recognition in China. Part of this is due to my many years in the Chinese market and close association with Wang Shi Xiang, one of the most revered and respected experts in Chinese art, who passed away several years ago, but also because both of our companies understand the Chinese culture and on a fundamental level, understand what customers need to feel comfortable when bidding on items that are in a country and culture that is geographically and emotionally far away.
Headlines would imply that Chinese contemporary art is at the forefront of the market. But according to artnet.com, the second best selling Chinese artist of 2014 was the Qianlong emperor and the sixth best selling artist was Qi Baishi, who died in 1957. What do you make of this?
Bruneau: With the “newer” class of collector today, it’s not uncommon to see contemporary artists leading the pack.
Manqueros: Clean, authenticated works are in high demand due to the excessive number of fakes that exist in the market today. It [the classical market] is a slippery slope that requires a higher level of expertise to participate, but I believe the rewards to be both financial and emotional.
Rabstenek: Solid, top-tier artists sell well and always will, regardless of the century they worked, or work in, just as a Picasso has strength in the postwar market and Rembrandt in the Old Masters market.
Mason: High prices often skew market results. In 2014, Lark Mason Associates sold a painting with a lengthy inscription by the Qianlong emperor that realized the highest price achieved for a work of art in an online sale with any company, approximately $4.2 million. Only a few results at that level are enough to push Qianlong into competition with some of the greatest masters of Chinese painting. Will that occur again in 2015? Very doubtful. It was a product of timing and luck.
We talk a lot about paintings. The visual arts databases are huge and detailed. Decorative arts are not as well tracked. Is this a help or hindrance in the marketplace?
Bruneau: Everything is tracked well enough today, even the decorative arts. It’s a help for finding out what an item is worth in today’s market, but it leaves a sort of paper trail for what you paid for the item when trying to sell it. Ultimately, it’s a double-edged sword.
Mason: Decorative arts are complicated. Lots of variations, media, dates and tight but small groups of supporters for every conceivable category. It is no wonder the press focuses on paintings. It’s a lot easier to digest. Those who are enamored of a particular subject are extremely focused and know their subjects but for many people who are not as interested, it can seem difficult to understand and explain. People are complicated and the things we like are as varied as we all are. That’s part of what makes the art business so interesting.
The media played up the sale last year of a $36 million Ming dynasty chicken cup purchased by Chinese businessman Liu Yiqian on his American Express card. What was the top selling Chinese decorative arts item sold at your gallery?
Bruneau: We sold a pair of Chinese porcelain panels for $60,000.
Manqueros: Our business is slightly more diverse. The Indonesian artists Ay Tjoe Chirstine and Hartanto along with Agapetus commanded the most attention and generated the best overall sales.
Rabstenek: On March 17, 2014, a Chinese pale celadon jade covered vase from the Eighteenth Century sold for $5,093,000.
Mason: The dramatic purchase and subsequent press surrounding the chicken cup is tough to top; however, Lark Mason Associates achieved a very solid result in our May 2015 auction for a Mongolian gilt bronze seated figure of Tara, dating to the Seventeenth/Eighteenth Century. It realized $487,500. Not a chicken cup but a good result for an esoteric object.
Callahan: It was an album of paintings by various Chinese artists that brought $1.2 million. The real story concerning the Chinese businessman was that he went back and forth with American Express until they gave him unlimited lifetime flights around the world and paid him for doing an ad where he’s drinking out of the cup. That puts the $36 million in a somewhat different perspective.
Overall, what is your market prediction for the coming year regarding the Chinese art market?
Bruneau: For the past five years the market has been strong, with the middle class of China ramping up their buying habits, basically buying back their heritage. In general, I see the upper class of collectors staying strong and taking money from the stock markets and investing back into tangibles and the mid- to lower items seeing a correction and leveling out in prices.
Hanbury-Tenison: What is certain is that gift-giving, whether of art or other luxury goods, has been hit hard but collecting has continued apace. Where collecting is concerned, the driver is not gift-giving, but rather the fast-growing private wealth of the entrepreneurial class in China so effectively measured by Rupert Hoogewerf, publisher of the Hurun Report. [The Hurun Report lists China’s wealthiest.]
The Chinese art market is here to stay. The demand for Chinese art is truly international and in many respects the mainland collectors are still catching up. There will be ups and downs, but the market is not going away soon.
Manqueros: Baron Rothschild, an Eighteenth Century nobleman and member of the banking family, once stated, “The time to buy is where there’s blood in the streets.” I think this will ring true with Chinese art and antiques. The Chinese art market is great place to hedge one’s bets.
Callahan: You have to realize that more than 1,000 years ago the Chinese had antiques shops. The stock market slide is not hurting the 1 percent entrepreneurs. If you’re trying to figure out where things are headed, watch the social dynamics. In China, everything is done by consensus. They compete against each other, true, but bidding something up is a form of creating group approval. When things go wrong, they have to share the blame. When they’re being really vague that is the closest sign that it’s all agreed upon; when they’re being specific, you can be sure there is no consensus.
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