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| Passion Investments: Art |
China Syndrome
Michelle Tsai
04/01/2007
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Coup de foudre is the phrase
that comes to Patricia Tang when she recalls encountering Chinese contemporary
art in the 1990s—a sudden passion that seemed all the more jolting because she
had collected master drawings by John Constable and Degas for years. "It just
felt right. I’d been buying French and English watercolors—and I’m not blond and
blue-eyed," says the American-born Tang. She later brought curator Gary Tinterow
of New York’s Metropolitan Museum of Art to meet sculptor Cai Guo-Qiang,
resulting in Cai’s pyrotechnic exhibit on the museum’s roof last year.
Inflated Hopes
Art critics struggle for adjectives to describe the rush
currently under way. As quickly as buyers have flocked to the burgeoning field
in the past two years, sales prices for the most popular artists have
skyrocketed. One work by Zhang that sold for $26,000 in 2003 fetched $1.2
million in 2006, according to New York art dealer Max Protetch. At this stage,
the question whispered among observers and collectors alike is becoming louder:
Is this a bubble?
"Everything is just going crazy," says Yung Ma, a dealer at Art
Statements, a gallery in Hong Kong. The Liu panorama, he contends, was
overpriced at $2.7 million. While appreciation for contemporary art is growing
in China, many mainland buyers view the works as investments they will quickly
flip. "They don’t care how much they pay because they hope it’ll go for even
more at the next auction," Ma says, adding that some Chinese artists prefer not
to sell to domestic buyers for this reason.
While many art devotees debate whether or not prices for
certain artists are spinning out of control, few deny that the long-term outlook
for this market remains strong. Demand in the domestic arena seems to be
expanding; at least some of the country’s 300,000 millionaires—many of them
newly wealthy—will bid to keep their national art within China’s borders. Like
many of his countrymen, Liu believes the fate of Chinese contemporary art is
inextricably tied to China’s rise. "The value of art," he says, "embodies both
the nation’s present strength and a faith toward the future."
Dilettantes interested in entering this market may find more
relative value if they look beyond the five or six most popular artists. A work
by an artist in the remainder of the top 20 group sells for an average of
$50,000 to $80,000—easily one-fifth or less the price for art by comparable
American or German masters, says Michael Goedhuis, a New York dealer who likens
today’s environment in China to European art in the early 20th century. In five
years, he predicts, the world’s most expensive art will be Chinese.
But even experienced art collectors need to exercise care to
avoid being gouged. China’s fledgling gallery network has yet to attract the
best artists; these men and women prefer to sell their work at auction or
directly to collectors through dealers—a practice almost unheard of in the West.
Because of a dearth of sales records, foreign buyers are often forced to rely
heavily on dealers, who are charged with screening for condition, history and,
in some cases, authenticity. "You don’t know whether an artist has done one hit
and it’s another like it," Protetch says. "You don’t know how many assistants
were involved."
As leading artists gain more international renown, collectors
hoping to avoid higher prices may seek out young artists. Eloisa Haudenschild
favors video and photography. She hosts emerging young artists from China and
Latin America in a residency program that she founded in her garage in San
Diego. To support artistic traditions in developing countries, she buys only
work by artists who have not reached the auction market. "When you establish a
relationship with a young artist," Haudenschild says, "then you get the direct
reward of knowing you bought a camera for them or whatever it is they need for
their careers."
But as investments, Haudenschild holds no illusions of grandeur
about discovering the next Fang. "With contemporary art you’d better love the
work," she advises. "Because there’s no assurance."
Michelle Tsai, based in Jersey City, N.J., writes about business
and Asia.
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