 ince the summer of 2005, China contemporary art auction has entered a phase of leaping development. This can be illustrated by the business of China Guardian Auctions, the first auction house dealing in oil paintings and sculptures on Mainland China. Before 2003, its sale generally reached no more than 10 million RMB yuan, while in the 2003 spring and autumn auctions, its sale reached 19.40 and 14.58 million yuan respectively. In the following auctions, its sale rose rapidly with a rate of 40%, 83.4% and 105% higher than the preceding one until it jumped over 100 million yuan for the first time in the autumn of 2005, reaching its peak sale point. While in 2006, its sales lingered around 100 million and dropped 5.7% and 6.2% respectively in the two auctions.
This set of data projects in a way the trend of contemporary art market in recent years, i.e. contemporary art market has ushered in its profit-gaining period after years of persistence, but the accelerated growth also brought up some new situations and problems, and the rapidly increased auctioned articles quickly led to the adjustment of market in the autumn of 2006. Given the special place of auctions in current Chinese art market and the large amount of data available for analysis and discussion, we explore the status quo of China contemporary art market and collection on the basis of observations from auction market.
2006 Spring Auction Volumes of Five Major Auction Houses in Bejing
Conceptual Definition of China Contemporary Art
Contemporary art, by international definition, generally refers to the art after 1945 (after the World War II), while the concept of modern art mainly embraces the art from the pre-1945 period to the impressionism. In China, the concept of contemporary art is quite distinct from international criterion, not only in its time range but also in its definition. It was mostly called “New Wave Art”, “Modern Art” or “Avant-garde Art” in the 1980s; while in the 1990s, the designation of “China Contemporary Art” was increasingly popularized. Into the 21st century, the concept of “China Experimental Art” was raised in the first Guangzhou Triennial, a contemporary art exhibition with a retrospective nature. But generally, the term “China Contemporary Art” was used more frequently.
This concept is equally confusing in circles of collectors and auctioneers. Perhaps we can never clarify it but can only reach some general agreement on it. In terms of the organizational divisions of auction houses and the print of catalogues, it was generally labeled “China Oil Paintings and Sculptures” in Mainland China, “Twentieth-Century China Art” or subsumed under “Twentieth-Century Asia and China Contemporary Art” in Hong Kong, or frequently titled “Chinese Western-Style Paintings and Sculptures” in Taiwan. Apparently, these various classifications are all reasonable but not accurate enough. For example, the terms of “China Oil Paintings and Sculptures” and “Chinese Western-Style Paintings and Sculptures” do not include photographic works and works of general materials, while “Twentieth-Century China Art” does not embrace the works created in the twenty-first century, nor does it distinguish the oil paintings created in Republic of China period from the present avant-garde art.
Actually, these confused classifications are largely caused by the unique nature of China contemporary art, which was relatively independent of the outside world before 1979. When pop art, performance, installation, conceptual art and other forms of art were vigorously practiced in American and European art scenes, Chinese art was dedicated to its own “socialist realism”. After the door was opened to the outside world in 1978, all the art that was anti-Soviet-style could be called contemporary or avant-garde. For instance, borrowing from European classicism in the 19th century and American Local School in the middle of the 20th century, the works created by artists Chen Danqing, Jin Shangyi, Ai Xuan and others were undoubtedly not “contemporary art” of the western world at that time, but in the Chinese art atmosphere after the late 1970s, all ‘anti-Soviet-School’ art could be regarded as avant-garde which was directed at certain goal of art and contemporary aspect of culture.
Today, “China Contemporary Art” generally refers to the art after 1979, which was somewhat original, avant-garde and rejecting established norms, which further included new art forms like photography, installation, conceptual, performance, video and multi-media. The “Star Art Exhibition” held in 1979 in a small wayside park on the eastern side of China National Art Museum was generally regarded as the beginning of China contemporary art.
The Widely Attended Second-order Market
In the 1980s there were no contemporary art collections in a strict sense; even if there might be, they were done secretly and offered no way to make statistical analyses. In the 1990s, auction houses stepped in, providing open platforms and price data for art collections, researches and references. Here we base on the data from Beijing, the auction center of Mainland China, to make the analyses.
In 1994, China Guardian initiated a specialized auction of oil paintings and sculptures, which was the first case in Mainland China, with a sale volume of 1.9613 million RMB yuan and a sale rate of 70.59%. In the following eight years from 1994 to 2001, China Guardian held 16 special auctions and dealt a total volume of 106.5918 million RMB yuan, with an average of 13.3238 million per year and 6.6621 million per auction. Plus the total sale of 9.9031 million by Hanhai and Rongbao in 4 auctions in the two years from 1999 to 2000, the total volume of all auctions reached 116.4959 million yuan, averaging 14.562 million per year and 4.854 million per auction.
In the three years from 2002 to 2004, the total sale of 12 auctions by China Guardian and Huachen reached 143.71 million RMB yuan with an average of 47.9033 million per year and 11.9758 million per auction, and the auctioned articles reached 1,013 pieces. Adding up the sale by Hanhai at the end of 2004, the total volume reached 170.7873 million, averaging 56.9291 million per year and 13.1375 million per auction.
In the two years from 2005 to 2006, the seven major auction houses in Beijing (Guardian, Hanhai, Poly, Huachen, Council, Chengxuan and Rongbao) held 28 special auctions and made a total sale of 1,786 million RMB yuan, with an average of 893 million per year and 59.5621 million per auction, and the total number of the auctioned art works increased to 4,484 pieces.
A General Statistical Table of Auctions in Beijing
(Note: If in one auction season a certain auction house held many auctions for oil paintings and sculptures, the sale volumes for every auction are added up to be the total sale volume of the auction season, and all the auctions in the season are counted as one auction. For example, in the 2006 spring season, Guardian held two special auctions: “China Oil Paintings and Sculptures” and “Twenty Years of China Contemporary Art”, these two auctions were counted as one spring auction, and the sale volumes of these two auctions were added up to be the sale volume of Guardian spring auction for oil paintings and sculptures.)
Based on this, we can roughly outline the growth of auction market for Chinese oil paintings and sculptures.
One. The Initiating Period from 1994 to 2001. During that period, smooth cooperation and interaction between artists and galleries had not yet been developed, and the gallery industry as the basis of market was not well developed. The underdevelopment of the first-order market forced the high-end auction houses of the second-order market to share some responsibility of cultivating the art market. The whole situation with auction market was a low sale volume, with an average of 13.3238 million RMB yuan per year and about 6 million per auction, and the small number of auctioned art works could hardly break the limit of 100 pieces. In the 8 years, Guardian seized up the largest share of the auction volume for China oil paintings and sculptures.
Two. The Growth Period from 2002 to 2004. A rudimentary basis of gallery industry was established in China, and the first-order market began to take shape. The yearly average sale volume in the auction market rose to 35.5688 million RMB yuan, an average of 22.245 million higher than that in the initiating period, with an average increase rate of 166.96%. And the benign competition between two or three auction houses was formed in the auction market.
Yearly Average Sale Volume (Million RMB yuan)
Three. The Peak Price Transition Period from 2004 up till now. Actually in 2003 after the end of “SARS” plague, the wave of soaring price had begun to surge, which culminated in 2005 as a result of years’ market cultivation. With a better market emerged quickly a large number of auction houses, and those that engaged in art auction business had increased to seven: Guardian, Hanhai, Poly, Huachen, Council, Chengxuan and Rongbao. In the two years from 2005 to 2006, the seven auction houses held 23 specialized auctions and made a total sale of 1,668 million RMB yuan, averaging 834 million per year and 77.6708 million per auction. And the total number of auctioned art works had increased to 4,728 pieces.
The rapidly growing market and the synchronously increasing auction houses had brought about the fierce competition and accelerated adjustment. In November of 2006, the five major auction houses – Council, Poly, Guardian, Chengxuan and Huachen struck the hammer successively in a week, the average sale rate of 68.6% dropped 18.2% compared with their spring auctions, giving a warning to the prosperous China contemporary art market. When the ensuing auctions by Christie’s in Hong Kong, Hanhai in Beijing and Ravenel in Taiwan achieved the rises of both sale rate and volume, it seemed to have brought some warm enthusiasm to the somewhat chilly contemporary art market. The situation was confusing, and the market quickly entered the phase of adjustment.
“Warring States” Period: Regional Distribution of Auction Houses
Until 2006, China contemporary art auction had evolved to make Beijing and Hong Kong the centers, New York the observation post, and Taiwan, Shanghai, Nanjing and Hangzhou the regional centers. In Beijing, there were Guardian, Hanhai, Huachen, Poly, Chengxuan and Council competing; in Hong Kong, there were the age-old Sotheby and Christie’s; in addition, there were about ten auction houses in Shanghai, Hangzhou and Nanjing.
Before the autumn of 2004, only Guardian and Huachen constantly engaged in auction business of China oil paintings and sculptures and contemporary art. Before that time, Sungari International held two auctions of China contemporary art in 1996 and 1997; Hanhai held three in 1999 and 2000; Rongbao had one in 2000. However, all auction houses except Guardian generally made only a sale of two or three million RMB yuan per auction with a sale rate of about 50% that time. Consequently, Sungari International, Hanhai and Rongbao suspended that item one after another.
A Table of the Spring and Autumn Auction Sales in 2006 by the Five Major Auction Houses Who Co-sponsored the “Beijing Auction Week”
In the spring of 2002, Huachen held a special auction of oil paintings and sculptures, thus emerging in China two auction houses that consecutively held special auctions of China oil paintings and sculptures. Hanhai restarted that item of auction in the autumn of 2004, Rongbao in the spring of 2005, and Poly and Chengxuan in the autumn of the same year. Council also ran an auction item of oil paintings when it was founded in the spring of 2006.
In Shanghai, Duoyunxuan, Dowmin, Hosane, Tianheng and Changcheng all successively opened their auction business for oil paintings, sculptures and contemporary art around 2005; and Jiatai, Orient Auction which had that business were founded even earlier. In Nanjing, the old firm Shizhuzhai and the newly founded Jiangsu Jiaheng Auction also engaged in the related business. And the Xiling, Zheshang and Nanbei auction houses in Hangzhou also successively ran auctions of oil paintings in recent years.
Having auction deals of Chinese oil paintings since 1985, Christie’s in Hong Kong held featured auctions of complete works by contemporary artists like Liu Xiaodong and Yu Hong in 1991. At present, it is Sotheby and Christie’s that dominate Hong Kong art auction market. The Sotheby in New York also held a “Special Asia Contemporary Art Auction” in March of 2006, featuring China contemporary art. Sotheby and Christie’s once did art auction business in Taibei but soon withdrew out of it; currently, the major art auction houses operating in Taiwan are Ravenel and Ching-Shiun. In Europe from 2005 to 2006, quite a few auction houses held China contemporary art auctions, which, nonetheless, were neither complete enough nor constant.
The Changing Market: Running Business Models the Future
Here we have made a general description of the historical process and regional distribution of China’s art auction industry. Actually, more detailed work of analysis is needed. Generally speaking, the auction houses’ sale volume, its own growth and its promotion of China contemporary art are currently conditioned by the following factors:
1. The professional quality and human relationship of the business directors;
2. The brand management and client service of the auction houses;
3. The quality auction articles, reasonable price and number of auctioned articles;
4. The whole market conditions;
5. The luck.
The first three factors could have determined the success or failure of an auction, while the success of an auction house relies upon its constant adherence to the first three points. With a history of only over a decade, the auction industry in Mainland China turns out a new and up-rising enterprise. The many auction houses around this country and a concatenation of auctions performed indicate that we are now in a “Warring States” period that produces no winner. Compared with the old and experienced Sotheby and Christie’s, auction business was just a latecomer in China. To develop a renowned auction brand of our own, we need to acquire more experiences and constantly promote our ability, and that needs patience and wisdom.
In view of the whole art market, auction is only one link in it. A voice of sharper criticism is reminding people, including author of this article, that we have paid unduly more attention to auction houses of the second-order market. Collectors keep too close eyes to auction prices by auction houses; galleries also try to promote prices of artists via auction houses. Contrary to the powerful auction houses, the growth of gallery industry is lagging behind and the support of national art museums and state policies for contemporary art gravely lacks.
 In fact, galleries should play the major role in a vigorous art market; art museums should end up as final destination of art works; and auction houses should only serve as a high-end second-order market, a market of conservative interest where only a small portion of people achieve business success. The healthy, enduring and sustainable collection relies upon the satisfactory interactions among galleries, art expos, auction houses and art museums under the support of relevant state policies.
When Arario Gallery constantly introduced first-rate international contemporary artists to Chinese people, when Art Beijing resolved to build a platform for Asian gallery business center, when Pianfeng New Art Space attempted to integrate folk resources of various parties to vigorously promote young artists, when China Ministry of Culture began to participate in international contemporary art exhibition events at Venice, São Paulo and other places, and when Wang Huangsheng, Fan Di’an and Li Lei began to take charge of several of the key national art museums, … we feel excited to see that all is in the process of adjustment, all is restarted and all is quietly progressing. There is opportunity at this moment and we can expect a better future. As is implicated in old Chinese sayings – “an inferior horse can cover a huge distance if it perseveres in traveling” or “all small steps added up can bring you to a destination thousand li far away”.
 Li Feng, art critic. He worked at an auction house for many years. He now studys for his M.D.at the Centre Academy of Fine arts and he's helping an organization to build a museum in Beijing.
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