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> Lothar Spree, 40+4 Art is not enough, not enough!

> Li Zhenhua, Multi-Archaelogy

> Zhang Wei, Throwing Dice

  Taking Stock: Perspectives on Recent History
Joe Martin Hill
  The development of the Chinese contemporary art market in recent years has been like a perfect Cai Guo-Qiang explosion event—unmarred by bad weather, technical difficulties, or even a curmudgeonly critical voice admonishing the dazzled audience as the spectacle unfolds. Yue Minjun’s infinitely numerous doppelgangers have smiled wider and wider as individual price records for Chinese contemporary art have ascended from one month to the next. And scores of Zhang Xiaogang’s extended family of haunting anonyms have been flown hither and thither as special guests at the peripatetic party.

The trio of artists just mentioned are among the leaders of the Chinese contemporary art market. Two years ago, none of them—indeed, no Chinese artist of the generation born after 1950—had achieved a million dollar price at public auction, or even half a million. Now, prized works—and, one must admit, even lesser works—regularly fetch more than a million dollars.

Nowhere is this expansion of the market more publicly evident than in the development of Sotheby’s Chinese contemporary art sales in Hong Kong or in the Pan-Asian (primarily Chinese) contemporary art sales in New York. Sotheby’s held its first Chinese contemporary art sale in Hong Kong in October 2004: between that and its third sale a year later, the total value of lots sold more than tripled, from USD $2,950,712 (HK $22,955,600) to USD $9,019,398 (HK $69,961,201); the total for spring 2006 was USD $16,995,902, an 88% increase from the previous fall. Sotheby’s sales in Hong Kong have continued to advance impressively, with the most recent sale, on October 7, 2007, grossing a whopping USD $34,240,517 (HK $265,583,250), which more than triples the results from the same sale in 2005. Following the April 2006 Hong Kong sale, the twice-yearly event was split into two sessions, one focusing on high-value but less widely followed modern art, the other on contemporary art. For the appropriate comparison with 2005, then, one needs to add the now-modest USD $8,314,034 (HK $64,487,000) realized in the modern session. From the underdeveloped USD $2.95 million market of October 2004, contemporary Chinese art has grown into what must be the most extraordinary story of the art market in decades, with a “same-sale” total three years later of USD $42,554,551—more than a fourteen-fold increase.

But if the goings-on in Hong Kong demonstrate the public market’s development from infancy to maturity, the sales in New York represent the debutante’s coming-out party. With the launch of a Chinese contemporary art department in New York in 2005, Sotheby’s held its first pan-Asian contemporary sale on March 31, 2006—a landmark event given its introduction of the category of Asian art in a major Western market venue. The sale grossed USD $13,228,960, improving Hong Kong’s total from the previous fall and no doubt adding momentum to the eastern port city’s spring sale only one week later. With 245 lots offered at the New York sale, 89.1% of them sold, yielding an average price per work sold of $60,132. As in Hong Kong, the first New York sale—less than two years ago, though we seem to have advanced a decade since—was a momentary benchmark for future development. The September 2007 sale in New York grossed USD $38,446,975, with 275 lots offered and 81.8% of them sold; the average price per work sold climbed to $170,875, a 184% increase over March 2006. The September sale total was a 191% increase over the first sale in New York, in March 2006.

My company has worked in a limited consultative capacity for Sotheby’s Chinese contemporary art department in New York since 2005, and it has been gratifying and fascinating to see Asian contemporary art achieve this stronger foothold in the global contemporary art market. Writing for Sotheby’s Preview magazine in April of 2006 and before the first New York sale, I pointed out four features of the market for contemporary Asian art that differentiate it from its Euro-American counterpart, “all of which,” I wrote at the time, “suggest an optimistic outlook for the market’s future.” These features and their implications were as follows:

1. “A comparatively small number of large names have garnered the lion’s share of attention, particularly in Chinese contemporary … Many other influential artists … have yet to receive the art historical recognition or visibility in the marketplace they merit. . . . The future will witness an increased number of artists achieving the successes that have so far been the privilege of relatively few.”
2. “While the art historical record is currently correcting past biases to more accurately reflect the geographic diversity of modern and contemporary artistic practice, the auction market has yet to catch up with this development.” I named a number of artists who “made significant contributions not only to regional artistic practices, but also to the history of art more generally” and stated that “recognition and reappraisal of their value is long overdue.”
3. The “stylistic divergence between artists working in recognizably contemporary forms and those who are no less contemporary but continue to mine the veins of traditional media” was identified as a blind spot of under-appreciated value in the broader contemporary market. Contemporary ink painting was what I had in mind; “curatorial and collector interest in the ink painting tradition has thus far come primarily from Asia, but this seems destined to change.”
4. “Finally,” I wrote, “what is true of underappreciated Japanese and Korean masters and of contemporary ink painting across the region is true even for those Chinese artists who have achieved spectacular results at auction: they remain undervalued on a comparative basis with their Euro-American peers. This is perhaps the most important distinguishing feature of the emerging Asian market.”
Not quite two years later, some revision now seems warranted.

The first prediction has already proved true; many artists beyond the familiar brand names have now achieved substantial prices at public auction. However, this has less to do with recognition of equal value than with the buoyancy of the market as a whole. There remain vast discrepancies between prices achieved (which are pretty objective as public records) and value (which some people prefer to see as purely subjective). As the influential Beijing-based collector Guan Yi stated in an interview in Hong Kong just before the fall 2007 Sotheby’s sales, “Good art is not always expensive, and expensive art is not always good.” I am more skeptical now that there will be an increase in the number of artists “achieving the successes that have so far been the privilege of relatively few”—if only because, in monetary terms, the “success” benchmark has increased by as much as a factor of ten from the spring of 2006 to the end of 2007!

I have mixed feelings about my second point, that recognition of art historical value would be increasingly reflected in the auction market. True, the artists named in the spring 2006 article have already seen increasing recognition of their “importance” or “value,” and there are many more one could easily identify today—that is, if appreciation in the marketplace and art historical recognition have any necessary correlation. Although I continue to believe in the enduring value of art historical assessment over the long duration which art history records, it is not entirely clear whether one should consider the present euphoria in the broader market for contemporary art as simply an event or, possibly, a paradigm shift in which the winning market writes its own increasingly persuasive art history. Although current valuations are very high and some of the prices currently achieved seem mind-boggling, the question isn’t one of bubbles or crashes in the market; corrections will inevitably come. It is rather of the overwhelming power of inexpensive and hence “under-valued” money to call the shots. Collectors of the traditional variety may buy “history,” but today’s savvy market investors with a lot of cash on hand buy brand names and brand images—sometimes with the hope of simply flipping the commodity for an advantageous return. If this has always been so, it seems to me more so today. As indication, one need only mention the variety of art investment products that have sprung up in recent years, the purpose of which is purely to generate financial returns for investors.

As for the third observation, I see no need for revision. Ink painting seems to me destined for greater recognition in both the market and curatorial communities, and one might extend this to other historical forms elsewhere that continue to be practiced in innovative ways. Of course, it is interesting that “Western-style” oil paintings have fared so much better in the Chinese contemporary art market than works that deploy traditional media, the basic reason for which is that works that appear overtly traditional have greater difficulty making visible their contemporaneity—and this at a time when making a show of one’s engagement with what is contemporaneity is critical. There are exceptions, of course, such as Xu Bing’s Square-word Calligraphy or Wenda Gu’s ink paintings of fake characters, but even the greatest contemporary masters working with ink and paper do not achieve the same degree of recognition in the marketplace as their peers working with oil on canvas. But regardless of whether marketplace value and art historical recognition correlate or not, centuries-old traditions that remain in some way vital today have no place to go from relative obscurity except towards greater visibility.

The last and “most important distinguishing feature” of the emerging Asian contemporary market identified in the spring of 2006 requires the most revision. The data points have shifted so dramatically as to render the earlier prognostications all but a quaint historical relic. Among the many who “remain undervalued on a comparative basis with their Euro-American peers,” I included “even those Chinese artists who have achieved spectacular results at auction.” The results are now even more spectacular, and, in some cases, the gap has closed entirely.

Before pursuing that thought, a few points of reference from the world beyond contemporary Chinese art are warranted. First, something Chinese from an alternative marketplace. The iShares: FTSE/Xinhua 25, an exchange-traded index fund that tracks the Chinese stock market (New York Stock Exchange ticker “FXI”), closed at USD $74.28 on March 31, 2006, the date of Sotheby’s first pan-Asian contemporary sale in New York. As of October 5, 2007, the Friday before the most recent Hong Kong sale, the FXI closed at USD $191.60. The increase in this China index in the same eighteen months was therefore about 158%—not quite as impressive as the aggregate results for Sotheby’s New York pan-Asian contemporary sales, but a remarkable advance for a stock index by any measure. Plus, the FXI shares are available at a fraction of the cost of the average unit price at Sotheby’s and are highly liquid; although share volume (the number of shares traded) can vary from day to day, on March 31, 2006, it was 267,100; on October 5, 2007, it was 5,824,300—more than a twenty-fold increase. The point here is not to compare the stock index fund with contemporary Chinese art as an investment; both have their benefits and risks. Rather, the heady advance in the stock index and the explosive growth in share volume during the same eighteen month period indicate that it’s not just Chinese contemporary art that’s hot. It’s virtually everything Chinese—particularly things mainland Chinese, so long as they aren’t the tainted consumer that made the headlines last fall.

Now back to things “art.” I was present at Sotheby’s in New York on the evening of November 9, 2004, when Mark Rothko’s vast, beautiful No. 6 (Yellow, White, Blue over Yellow on Gray) of 1954 sold for USD $17,368,000 (including Sotheby’s premium), far beyond its estimates of USD $9 to 12 million. It seemed a stunning sum; the seller (Robert Mnuchin, a former Goldman Sachs executive turned art dealer) was pleased, indeed. The work had last been publicly offered at Christie’s in May of 1987 where it sold for USD $924,000, yielding an enviable annualized rate of return—if one wishes to besmirch such an ethereal picture with the crass facts of its “value”—of 18.2% for the seventeen-year period. That evening’s sale took in USD $93.5 million, the highest total in fifteen years. The past sale total record was November 1989—right before the art market took a memorable, long-lasting nosedive.

Of course, the Rothko buyer of November 2004 has something to be pleased about, too: to the increasing number of people with the means to acquire one, a major Rothko for USD $17.4 million now seems a veritable bargain! Rothko’s slightly smaller White Center (Yellow, Pink and Lavender on Rose) of 1950 from the collection of David and Peggy Rockefeller sold last May 15 at Sotheby’s in New York for USD $72,840,000. The work had been acquired from the Sidney Janis Gallery in 1960 and had since been in the Rockefeller family collection. Although White Center is unquestionably the finer and more important of the two works, one can nevertheless use the two figures as a rough, ballpark estimate for the increase from 2004 to 2007 in the “value” of a major Rothko: about 319%.

The May 15, 2007 Sotheby’s sale took in the giant sum of USD $254.9 million, a 172.6% increase on the record-breaking November 2004 sale, though many records had been broken in between. I can’t remember whether the May 15 sale was a record, but, as the numbers just keep growing, it hardly seems worth keeping score any more. The following evening, Christie’s New York held its competing sale and took in USD $384.7 million on 74 lots sold. Most spectacular in that sale was Andy Warhol’s Green Car Crash—Burning Car I of 1963, a classic work measuring ninety by eighty inches, which sold for USD $71,720,000 against an estimate of USD $25–$35 million. Also in that sale was Warhol’s Lemon Marilyn of 1962, a twenty-by-sixteen-inch canvas that went for USD $28,040,000 (estimate undisclosed). By the time the evening of May 16 wound down, the ten Warhols offered had brought in a staggering USD $136,704,000, two exquisite Rothkos from 1961 together brought USD $49,360,000, a de Kooning went for USD $19.1 million, a small Jasper Johns for USD $17.4 million… Twenty-six artists’ auction records were made, sixty-five lots sold for more than USD $1 million, 74% sold above their high estimate… and so the story goes.

The point here is not to compare the stratospheric prices of a Rothko, de Kooning, Warhol, or Johns with the comparatively low prices of even high-flying contemporary Chinese artists like Cai Guo-Qiang, Yue Minjun, or Zhang Xiaogang. That specious comparison, to which I’ll return momentarily, strikes me as utterly ridiculous from an art historical point of view. Instead, the point with the emphatic number of 000s is that it’s not just contemporary Chinese art that’s hot; significant chunks of the modern and contemporary art market as a whole are hot. Within the last few hundred years, contemporary art has never interested so many at a time when money has been in such seemingly endless supply. “The only thing cheap these days is money,” as an esteemed colleague quipped to me some time back.

So what is going on in the Chinese contemporary art market and how does one explain all of this? In sum, the broader fascination for things Chinese, the wide-spread interest in contemporary art, the bottomless pits of money in the marketplace, and the appearance to speculators of an undervalued emerging market asset in the process of blasting off have created absolutely perfect conditions for the development of the Chinese contemporary market. Where it goes from here is anybody’s guess, and some will guess—and others will reason—better than others. But the pace of development we have witnessed over the last three years is without doubt unsustainable. No asset class can continue indefinitely to expand by more than 30% every six months. That level of momentum—moving so far so fast—eventually runs out of steam. This is not to say that prices will necessarily fall or that they will not continue to increase over the longer term. At some point, however, they will not continue to increase as fast as they recently have. And in this heady market, when things simply level off, it may seem to some that the sky is falling.

Given the number and diversity of collectors (or speculators) with enormous sums of money, and the staggering scale of those sums, some art world pundits believe the art market is comparatively insulated from the vagaries of the financial world, such as the ups and downs of the stock market. That is, if the wealth in individual hands is now more internationally diversified and that wealth is so deep that it would still be enormous even at half its size, there is a built-in buoyancy in the buying capacity of the art market. And with respect to Chinese contemporary, some believe that at some point in the future the newly wealthy Chinese, many of whom have made their sums with initial public offerings on the stock market, will wish to buy back their cultural heritage. All of this may indeed be the case, or it may be wishful thinking. What we know right now is that the FXI Chinese stock index has descended from its highs of near USD $220 per share achieved last fall and recently traded as low as USD $147, a decline of 33% in about two months. One shouldn’t necessarily take this as a warning sign as there is no necessary correlation between the Chinese stock market (or any other stock market) and the market for contemporary Chinese art. But both are emerging markets and these are volatile times.

So if a Rothko or a Warhol sells for USD $72 million and plenty of others for well above five or ten, should anyone bat an eye at a multi-million dollar price tag for a Zhang Xiaogang or a Yue Minjun? Certainly not when taken as specific, discrete events. But comparing Warhol to, say, Yue Minjun or Wang Guangyi isn’t specious just because Warhol is Warhol and the others aren’t; that doesn’t tell us much. It is silly because although apples and oranges are sold in the same currency in the local market, their relative pricing isn’t particularly useful in judging the intrinsic qualities of a specific apple or orange. Warhol is of such enormous and enduring importance to the development of art since the 1960s—art around the world, as Wang Guangyi’s work (and Ai Weiwei’s working methods) attests—that few artists of the twentieth century, and certainly of the latter half, are comparable. Warhol is important because one sees his legacy consistently in the formal strategies and working practices of countless later artists internationally. Does this justify a USD $72 million price tag? I’ve no idea. But, like him or not, Warhol’s work and life are foundational bedrock for what came after, and they seem ever more relevant today. As Warhol said, “I like money on the wall. Say you were going to buy a $200,000 painting. I think you should take that money, tie it up, and hang it on the wall. Then when someone visited you, the first thing they would see is the money on the wall.”

Warhol died, at the age of fifty-eight, in 1987. The superstars of the Chinese contemporary art market—most born in the late 1950s and early 1960s—have a few years to go before we can compare their output with Warhol’s oeuvre. But we should also remember that Warhol’s market was itself in the dumps in the 1980s and early 1990s. So it may well be another twenty years before we are able to see on a comparative basis the appropriate place of specific contemporary Chinese artists in the market and their resonance and importance in the international community—that is, the degree of their impact upon their peers and future progeny. This is the principal reason why price comparisons to Rothko, Warhol, or Johns are specious: it’s not Chinese apples and Western oranges, but entirely different generations of pickings, regardless the country of origin.

When one sets one’s sights on more appropriate comparables, however, the results are indeed revealing. Let’s look instead at the relevant generation of artists—say, artists born after 1950 anywhere in the world—whose work has reached USD seven figures in principal public sales venues—let’s say Christie’s and Sotheby’s in London and New York. This limits our search to what may unquestionably be called “global contemporary art” and provides a sample set of market comparables to Cai Guo-Qiang (b. 1957), Yue Minjun (b. 1962), Zhang Xiaogang (b. 1958), and others who sell for more than a million bucks at auction.

I might have missed a few, and it will probably change next week, but as of this writing, I can count only thirty such artists who sell in the million-plus range, including Chinese artists—a surprisingly small number given the overwhelming numbers habitually forked over for artworks these days. The “million dollar club” includes obvious characters like Jean-Michel Basquiat (American, 1960–88), Keith Haring (American, 1958–90), Jeff Koons (American, b. 1955), Takashi Murakami (Japanese, b. 1963), and Damien Hirst (British, b. 1965)—all direct heirs and protégés of Warhol in one way or another—as well as American “bad girl” painter Lisa Yuskavage (b. 1963) and her British peers Jenny Saville (b. 1970) and Cecily Brown (b. 1969), the youngest members of the club. German photographer Andreas Gursky (b. 1955) makes the cut, as does his famous American colleague Cindy Sherman (b. 1954). Belgian painter Luc Tuymans (b. 1957) is also there alongside South African-born Marlene Dumas (b. 1953) and the Scot Peter Doig (b. 1959).

As of this writing, there are ten Chinese artists born after 1950 in this million dollar club—all of whom have joined in the last two years, most within the last year. They are: Cai Guo-Qiang (b. 1957), Chen Danqing (b. 1953), Fang Lijun (b. 1963), Leng Jun (b. 1963), Liu Ye (b. 1964), Wang Guangyi (b. 1957), Yan Pei Ming (b. 1960), Yue Minjun (b. 1962), Zeng Fanzhi (b. 1964), and Zhang Xiaogang (b. 1957). What is most remarkable is how quickly the club membership has changed from being predominately Euro-American to approximately one-third Chinese. And for comparative newcomers to the market, the brightest stars have achieved remarkable repeat results: as of October of last year before the auction season had wound to a close, twenty works by Zhang Xiaogang had sold beyond a million dollars in 2006 and 2007, ten by Yue Minjun (all in 2007), five by Liu Ye (all in 2007), and six by Zeng Fanzhi (again, all in 2007). Since that time, these numbers have no doubt grown, and it is possible that more artists, both Chinese and other, have joined the million dollar club.

Based on the data as it stands, I see three possible interpretations. First, one might say there are now some artists of non-Chinese origin whose works trade at a comparative discount to that of their Chinese peers; this takes the prices recorded for contemporary Chinese artists as the benchmark for comparative analysis of the international peer group and would suggest there are unrecognized “other” artists of equal or greater “value.” Alternatively, one might argue that the brightest stars of contemporary Chinese art (or at least some of them) are currently overvalued; this takes the prices recorded for contemporary international artists in the generational peer group as the benchmark. Finally, one might suggest that although we did not know it even a few years ago, a full third of the most significant artists born after 1950 internationally are, in fact, Chinese; this interpretation takes market values as proxies for “significance” and the demographics of the “million dollar club” at face value. While each of these interpretations may be partially true, and one or another must be mostly true, none is entirely satisfying.
As the vast array of moving targets that constitute the market continues to evolve, the reader may choose which, if any, of these interpretations seems most convincing in light of the data. Where the Chinese contemporary art market will go from here is anybody’s guess. What seems clear is that we are unlikely to be in the same place two years hence - and that some will interpret the relationship between value and price better than others.