Chinese art

Investing in Chinese contemporary art

As Chinese contemporary art sales exceed $3 billion, art industry experts at Macquarie's Greater China conference opine on how to invest in the right artists.
Qi Baishi's art on display during a preview in Beijing

The Chinese contemporary art market accounted for one-third of global fine-art sales last year, according to analysis by Artprice, overtaking both the US and UK.

The French art information company also found that four Chinese artists ranked in the top 10 worldwide by auction revenue in 2010: Qi Baishi, Zhang Daqian, Xu Beihong and Fu Baoshi. Artprice’s definition of fine art comprises paintings, installations, sculptures, drawings, photography and prints.

No wonder then that Macquarie chose to include a panel discussion on investing in contemporary Chinese art during its annual Greater China conference last week. In his introductory remarks, a Macquarie spokesman defined the size of the Chinese contemporary art market last year as greater than $3 billion.

Hong Kong-based art critic and curator Valerie Doran moderated the panel, starting with a bird’s eye view of the development of the Chinese art market during the past 2,000 years. As she progressed through different periods and styles of art, Doran continuously stressed how the art of the time was influenced by the socio-cultural milieu. For example, in the 1930s when China was in the midst of a crisis, artists began to depict discontent and spread a revolutionary message through their paintings.

Panelist Meg Maggio, who has been involved in the Chinese contemporary art world since the eighties and in 2005 established the Pekin Fine Arts gallery, was in complete agreement with Doran. “Sometimes conferences focus too much on the art market and not enough on how societal changes reflect in the art market.”

Urs Meile, who has also been involved in the art world in China as long as Maggio, recalled a time in the nineties when shows by first-generation Chinese artists were not received with much enthusiasm by museums or important collectors in Europe. Meile founded Gallerie Urs in 1992 and since 1995 has promoted Chinese contemporary art. In 2005, Meile opened a branch of the gallery in Beijing.

“China has taken part in both sides of the Cold War, both the right and left,” said Johnson Chang, owner and founder of Hanart TZ Gallery in Hong Kong, talking about what has influenced Chinese contemporary artists. Chang worked with two other gallery owners around 1989 to put together one of the first shows that showcased Chinese contemporary art for a worldwide audience. The show toured for five years.

“We were lucky to be in the right place at the right time,” said Georges de Tilly, who used to be at Jardine Fleming and subsequently founded Magnet Investment Advisers. His wife Katie runs the 10 Chancery Lane Gallery, which has a focus on art from China and the rest of Asia. De Tilly was also complimentary about Chang, saying that in the early days of the discovery of Chinese contemporary art, a visit to Hanart was a given for anyone with an interest in Chinese art.

When the discussion moved on to the high prices that a number of Chinese contemporary artists now command, Meile made the observation that some large western art collectors don’t have works of Chinese contemporary artists in their collections because by the time these works became available internationally the prices were already very high. Many large western collectors start buying artists when they are young and not established, and pride themselves on identifying future masters. Meile contrasted this with buyers in Asia who are happy to pay the high price established contemporary artists command.

The conversation then segued into the topic of investment. “Look at as much art as you can, go to as many exhibitions and galleries,” was the advice of Maggio to buyers.

“Art is a very good investment if you are interested in content,” was Meile’s observation.

This is a special moment in Chinese contemporary art, said de Tilly, who compared building an art collection to constructing a small investment portfolio. He also conceded that luck and timing plays a role, citing the example of the prices Picasso commands. De Tilly said that most people who have bought Picassos since the fifties have made a “fantastic return” of 10% annually. However, some have lost money buying the wrong works or at the wrong time.

“There is a big difference between art and other investments,” said Chang. He drew an analogy that perhaps resonated with the audience in the room, comparing art buying to venture capital and saying the buyer should feel the excitement of growing with the artist.

The dinner event scheduled for the day continued the art theme, pairing fine wines selected by Sotheby’s wines and Chinese contemporary art provided by the gallery owners on the panel.

¬ Haymarket Media Limited. All rights reserved.
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