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(BEIJING) 'Beauty and Silk Fan', a painting by Chen Yifei, was one of the artworks offered for sale at an auction held by the Council International Auction Co. It was the first art sale since the Chinese government shut bars, cinemas and other entertainment outlets for three days to commemorate the 41,000 people estimated to have died in last week's earthquake. Buyers stayed away, forcing the auction house to allocate extra bidding time for the star lot, Wang Guangyi's 1992 'Great Criticism - Marlboro', in an effort to draw a buyer. - 2008 May 23

Saatchi makes comeback with Modern Chinese
Latest gallery in Chelsea is a triumph architecturally

(LONDON) Charles Saatchi is synonymous with the revival in British art in the 1990s. The collector introduced the world to Tracey Emin and Damien Hirst's shark. His Saatchi-style is a recognisable genre: it's visceral, figurative, sometimes shocking.

Talent-spotting: Visitors looking at an artwork entitled 'Chinese Offspring' by Chinese artist Zhang Dali at the Saatchi Gallery, in west London. The gallery, which opens to the public tomorrow, has as its inaugural exhibition 'The Revolution Continues: New Art From China', bringing together 24 of China's leading artists

The Saatchi Gallery on King's Road, Chelsea, formally opens tomorrow. It is a triumph, architecturally at least.

The first exhibition, 'The Revolution Continues: New Art from China' is exactly what we have come to expect from Saatchi shows. How much you like it will depend on your taste for bold imagery and old-fashioned figurative painting.

While much contemporary art is cool and cerebral, Saatchi favours subject matter that nobody could possibly mistake. A sculpture by Liu Wei, 'Indigestion II,' represents a pile of excrement two metres across. Wei's offering is undeniably - in fact inescapably - visceral. Saatchi- type art often is.

This, the third Saatchi gallery to date, is housed inside in the Duke of York's Headquarters, externally an imposing neoclassical building of 1801. Internally, this old military structure is now spare, elegant and minimalist. Imagine Tate Modern without that forbidding touch of austerity and menace.

The new building is an improvement in every way on Saatchi's previous premises in the Edwardian offices of County Hall. Those rooms, with their oak panelling and stopped municipal clocks, had a surreal charm but were a challenging environment in which to install art.

The galleries mark a return to the 'white cube' conception - now standard in contemporary spaces - which Saatchi himself introduced to London with his first institution two decades ago. Perhaps it was the success of the building that won me over - well, almost - to the work on display.

There have been a lot of shows of new Chinese art in recent years, and auction prices continue to rise stratospherically. Still, not much on view has been truly new in conception as opposed to geographical origin.

There is no new signature Chinese style or idiom. Instead, a range of diverse art is being made in the Far East by a legion of artists. From this, western curators tend to select the kind of thing they like anyway. Thus in 2006 the Serpentine Gallery presented a show, 'China Power Station', that was almost entirely conceptual or video-based.

Saatchi, on the other hand, has come up with Chinese artists closely resembling the ones he discovered in early 1990s Britain.

There are several oriental equivalents, for example, to Ron Mueck, the hyper-real sculptor whom Saatchi originally discovered. Of course, everyone has influences, and you might argue that Hirst, Emin & Co were often derivative themselves. Some of this Chinese Britart packs quite a punch.

Sun Yuan and Peng Yu's 'Old Folks Home' fills a whole room with highly convincing images of old men, somewhat resembling world leaders, each seated in a wheel chair and colliding with each other like so many dodgem-cars. At first glance, you think a gallery tour of senior citizens has got trapped in the basement. That's the true Saatchi sensation, with no excessive concern about good taste.

But there's more to what he promotes and presents than simply shock. Over the years Charles Saatchi has proved himself a remarkable talent-spotter. His exhibitions are a valuable antidote to the - diametrically different - Tate-sponsored brand of contemporary art. It's good to have him back. -- Bloomberg 2008 October 8

ASIAN COLLECTIBLES

The potential of China, with its vast population and spiralling wealth, to drive the global contemporary art market over the next few decades has encouraged auction houses, dealers, and fair organisers to attempt to do business there. This is proving difficult, with restrictions placed on the opening on the mainland of overseas salerooms and dealers. - FINANCIAL TIMES

If anyone wanted further proof that contemporary Chinese art is now a force on the international stage it was this investment by the canny Charles Saatchi, who paid double the presale forecast for the compelling painting, an eerie evocation of the rigid family photographs of the Mao era. - 2006

Rare masterpiece: Xu Beihong’s Put Down Your Whip went to an anonymous bidder at Sotheby’s sale

An oil painting by late Chinese artist Xu Beihong fetched HK$72 million at auction in Hong Kong, a world record for a Chinese painting

Auctioneers Sotheby's had expected the 1939 painting of an anti-Japanese street play, "Put Down Your Whip," to fetch at least 30 million Hong Kong dollars.

It eventually went to an anonymous phone bidder for a hammer price of 64 million dollars, plus eight million dollars commission for the auctioneers.

"It's a painting of rare and important historical value," said Sotheby's head of Chinese paintings CK Cheung after the sale. "It's important because it exemplifies Xu's technique -- which is to have combined Chinese and Western influences," he said.

Another painting by Xu, "Slave and Lion" set the previous record of 53.9 million dollars when it went under the hammer at Christie's here in November.

The sale is the latest record to be set in Hong Kong since Sotheby's and its rival auction house Christie's set up shop here several years ago to cash in on the growing market for Asian art.

Both houses hold two sales each year and interest grows with each auction. While most bidders still come from the traditional art-buying markets in the United States and Europe, Asian buyers, especially newly wealthy Chinese, are beginning to make an impact.

The patriotic Xu, who was renowned for his horse paintings, was inspired to paint "Put Down Your Whip" after watching a street play in Singapore about a father and his daughter in wartime exile due to the Japanese invasion.

The life-size female character in the painting was Xu's actress friend Wang Ying.

Cheung said the painting was a historical document in itself as it captures a key moment in the life of the artist, who was a political activist involved with the resistance against the Japanese occupation of China.

"The lady is a friend of Xu's whom he met while in Singapore while he was drumming up support for the resistance against the Japanese," Cheung said.

Xu's work is the highlight of the auction house's Chinese Art sale, offering 180 lots of paintings, inks and sculptures from several artistic periods.

Sotheby's said the picture had been exhibited several times when Xu was still alive, but it was last seen in public in 1954 -- a year after Xu died -- since when it has been passed between collectors.

Some art historians have criticised the recent explosion in the prices for Asian art, which 10 years ago was struggling to attract any interest. Some have criticised over-exuberant first-time Asian buyers for artificially sending prices sky-high.

Sotheby's Asia chairman Patti Wong, however, said the Xu piece would have sold well in any market.

"Given the rarity of Xu's works, the historical element of this piece, the quality and the fact that he is considered a master, this piece would always have sold this high," Wong said. - AFP 2007 April 7

Chinese buyers snap up all lots at auction

(HONG KONG) Chinese buyers announced themselves as a potent force in the international art market yesterday after snapping up every lot in a multimillion dollar auction here.

'This is a home return,' Kevin Ching of Sotheby's said after the sale, which saw 10 ancient works of Chinese art and antiques go under the hammer for a total of HK$128.3 million (S$24.8 million).

In what auction houses call a 'white-glove sale' - when all items are bought - a rare faceted 16th century famille-rose vase of the Yongzheng period from the Qing dynasty was sold for HK$22.7 million.

'This collection is significant as none of the pieces have been seen publicly for more than 30 years,' said Mr Ching, chief executive of Sotheby's Asia.

'That they all went to Chinese buyers is very important and shows that China has become a major component in the world art market,' he said. 'They are repatriating their cultural wealth to the motherland.'

The collection was being sold by a connoisseur of Chinese art from Paris, the auction house said. The lots were part of the latest of its four-day sales, which have become biannual events in this wealthy southern Chinese city.

Sotheby's and rival Christie's have seen business in Hong Kong soar in the past 10 years as interest in Asian art grows, and Asia's newly wealthy turn increasingly to art as an investment.

While most bidders still come from the traditional art-buying markets in the US and Europe, Asian buyers, especially newly wealthy Chinese, are beginning to make an impact.

On Saturday, an oil painting by master artist Xu Beihong set a world record sale for a Chinese painting when it went under the hammer for HK$72 million.

Yesterday's sale set another milestone in the Asian art market when a rare set of seven Chinese jade archers' rings from the Qianlong period of the 18th century sold for HK$47.36 million.

The rings, worn by archers to protect their thumbs from the strings of the bows, went to a private Chinese bidder.

'This is significant because before now, the market in Asian art has been centred on ceramics,' said Mr Ching. 'This shows that there is great appreciation for important works of art.'

Sotheby's chairman Patti Wong hailed the two days of sales, saying they had far exceeded expectations.

'What is encouraging is that we are seeing a greater depth of buying - there are not just one or two people bidding for each lot but several. It's an indication of the importance placed in Asian art,' she said. - AFP 2007 Aptil 9

Trendy collectors' items
The market for Chinese contemporary art is booming, but what are the effects of this rise?


Inflated prices: Zhang Xiaogang's Yellow Tiananmen Square (above), painted in 1993, has been recently sold to Christie's Hong Kong for HK$1.8 million by an overseas collector who had purchased it from Soobin Art Gallery for US$15,000 in 1995	Hot works of art: Humorous tongue-in-cheek portraits of Mao Zedong (like the one above) are popular with younger collectors; Zhang Xiaogang's Bloodline Series: Family (next) was the highest lot sold at Phillips de Pury & Company's Feb sale achieving €321,600, against a pre-sale estimate of €100,000 to €150,000

What do Zhang Xiaogang, Wang Guanyi, Yue Mingjun and Fang Lijun mean to the average person on the street? Probably nothing but to the art buyer, you are referring to the hallowed F4 - not the Taiwanese boy band, but the top four Chinese contemporary artists who are currently top of the charts in the volatile art auction market.

Chinese contemporary art is the hottest ticket in the auction world today. With the rise of global wealth, the desire to own a piece of China's history as it develops, and its competitive pricing compared to Western art, the market is booming, and does not seem to be peaking any time soon.

If anything, says Michael Moses, co-founder of the Mei/Moses Fine Art index, the Chinese contemporary art market is moving at a feverish pace and it projects very strong growth - base sales are doing well, with high percentage of pieces sold (at auctions).

The Mei/Moses index, started with his colleague, Mei Jianping at New York University Stern School of Business, measures the co-relation of art performance relative to the S&P 500 index.

Yap Chin-Chin, a Singapore-born specialist of Chinese Contemporary Art based at Phillips De Pury & Company, New York, believes Chinese contemporary art is competing on both price and fashion trends.

'It is also seen as rather trendy or progressive to be in on the contemporary Chinese market,' she says.

'Many of these works feature historic references such as images of Mao and Tiananmen. Collectors like owning a piece of what they perceive as history but even the most expensive contemporary Chinese artworks are still a bargain compared to their American or European counterparts.'

It is no surprise that collectors worldwide are catching on. Sotheby's and Christie's reportedly sold US$190 million worth of mostly Chinese contemporary art in 2006, as compared to US$22 million in 2004.

Auction houses are also featuring more Chinese contemporary work at contemporary art sales, traditionally driven by top Western artists such as Andy Warhol and Francis Bacon.

Rising strength

Zhang Xiaogang's Bloodline Series: Family was the highest lot sold at Phillips de Pury & Company's February sale achieving 321,600 (S$960,928), against a pre-sale estimate of 100,000 to 150,000.

Interestingly, Zhang's Bloodlines Series: Three Comrades (1994) is estimated to fetch US$1.5 million to US$2 million at Sotheby's upcoming Contemporary Asian Art March sale. This would put him in the same league as top contemporary artist Damien Hirst, who also counts advertising guru Charles Saatchi among his collectors, testament to the rising strength of Chinese contemporary art market.

On the home front, Chinese contemporary art is also escalating in price, popularity and status, reflecting the strength of international market trends. Industry observers and dealers have seen growing interest in Chinese contemporary art, evidenced by a marked 10 to 20 per cent growth in buyers.

Stephane Le Pelletier, director, Opera Gallery Asia-Pacific, is not surprised. 'Singapore's art market gets its cue from the international and regional art scene which sees a high focus on contemporary Chinese art.'

Experts also attribute this rise to several factors - the booming local economy, historical significance of such art, a shift in collecting patterns and increased exposure to Chinese contemporary artists which make them more socially acceptable.

Rising attention

Says Meley Law, manager of Linda Gallery, which has recently set up two galleries in Beijing focused on Chinese contemporary art: 'Now everyone is hot about everything about China, and naturally the attention on Chinese contemporary art is also rising, given the economy is doing well.'

Kwok Kian Chow, director, Singapore Art Museum, believes that the historical significance of Chinese contemporary art is certainly fuelling its popularity in Singapore and the rest of the world.

'Art historically, Chinese contemporary art is an alternative to mainstream modern art. It is aligned with philosophical and aesthetic trends of the period and also expresses a certain human condition that is easy to identify with,' he points out.

These works, having been created at significant phases in China's turbulent history, have also incorporated ideas and values from the Cultural Revolution which further resonate with buyers.

Increased exposure to Chinese contemporary art has also played an important role in making such artists socially palatable. Young local collectors, travelling more for business and pleasure, are increasingly exposed to international art fairs and gallery exhibitions of Chinese contemporary art worldwide, heightening their interest in this area.

Veteran photographer, dealer and owner of Soobin Art Gallery, Chua Soo Bin believes that this is long overdue, having championed Chinese contemporary art for several years.

He believes that the rising popularity can also be attributed to a shift in collecting patterns. 'Many buyers are not only influenced by major shows held by top curators worldwide - a lot of collectors who used to collect ink paintings are now collecting Chinese contemporary art instead.'

In 1997, Mr Chua recalls not selling one single painting when he first brought in top calibre artists, including the F4 group to Singapore for an exhibition entitled Red and Grey: Eight Chinese Avant-garde Artists. 'Many people thought I was crazy,' he laughs.

The situation now is reversed. As the Chinese contemporary art market accelerates, it has serious repercussions. Many artists, galleries and dealers, keen to get a piece of the action, are springing up everywhere, some of which do not even know about art.

Muses Ludovic Bois, director of Chinese Contemporary Gallery, which has branches in New York, London and Beijing: 'Prices are going up and collectors and speculators are buying aggressively. Lots of people want to deal and few have been in the field for a long time.'

Mr Chua also attests to this trend, having seen some of his clients turn gallery owners to cash in on the Chinese contemporary art trend in countries such as Indonesia. 'Some even have a higher mark-up than mine,' he quips.

Works sell at inflated prices - for instance, an overseas collector purchased Zhang Xiaogang's Yellow Tiananmen Square from SooBin Art Gallery for US$15,000 in 1995. Some 10 years later on Nov 26 last year, he resold it to Christie's Hong Kong for HK$1.8 million (S$352,130).

The upcoming Sotheby's sale in April will feature another one of Zhang's works entitled Tiananmen, estimated to sell in the range of US$650,000 to US$910,000.

Another consequence of this boom is the rise of low-quality Chinese contemporary art. Young living Chinese contemporary artists, empowered by the overwhelming market opportunities, rapidly create more works to cater to this increased demand. Many local gallery dealers bemoan having to sift through large amounts of low-quality work, a disturbing trend in this frenzy.

However, a silver lining prevails. Industry experts believe that the Chinese contemporary art boom has created a new market segment in Singapore - young, professional executives in their 30s and 40s, often in the banking sector, who spend tens of thousands on Chinese contemporary art in the hope of turning a quick profit.

Implosion of prices

These adventurous investors, flush with cash and on the look-out for rapid yield-seeking investments, are enticed by the prestige of art investment. Encouraged by the sudden liquidity, they are buying art from local dealers to sell in the short term at worldwide auctions, contributing to a sharp implosion of prices.

They are now purchasing Chinese avant-garde works, which are currently in fashion.

Mr Bois from Chinese Contemporary Gallery has also seen a number of Singapore buyers. 'They are a mixed bag of true collectors, speculators, people buying to flip at auctions and investors,' he says.

Although Singapore does not greatly impact the international art market, it is this type of rapid activity that worries experts such as Mary Hoeveler, managing director of Art Advisory Services at Citigroup Private Bank. 'There are no certainties as to the financial rewards of collecting art. Of course, there are dealers and others who speculate and sometimes do quite well. We certainly have concerns about the fast growth in the contemporary market. From our experience, the art market, like all markets, has periodic downturns and corrections.'

So what does this mean for Singapore buyers? Tread with caution and be selective, experts advise.

Cautions Mr Chua: 'There are a lot of low-quality works coming up. A lot of young people nowadays think Chinese contemporary art is a good investment, but they have to like the art before buying. It is the aesthetic value that has to come first, before financial reward. Buyers should also look for historically significant styles, unique techniques or concepts as this differentiates a good artwork.'

Investment pieces should always be by artists who are represented by reputable galleries or those who have done well in the local auction market in China or international auction market, advises Ms Law from Linda Gallery. She adds that a certificate of authenticity for the artwork should also be obtained, as it is invaluable for resale.

Ms Hoeveler from Citibank concludes with sound advice: 'Those who are cautious, who do their homework, are well advised, and take a long-range approach to collecting, are the ones who benefit most both in terms of their pleasure in collecting and their success as investors.' - by Emily Ang BUSINESS TIMES 2 March 2007

Zhang Daqian, a painting by "China's Picasso"
2005 INVESTMENT OUTLOOK -- THE BEST PLAYS
Why Collectors Are Crazy For Chinese Art

It's not only dynastic porcelain vases. Art mavens are buying contemporary works as well

Back in the 1960s and 1970s, when Jim Eccles was working as an IBM systems engineer, he fell in love with the work of the late Chinese artist Chao Chung Hsiang, who was then living in New York. Now 69 and retired, Eccles still loves the seven colorful paintings, some abstract and others in a more traditional Chinese style, that he bought for $200 to $500 each. But lately he has thought about selling them. Based on recent auction sales, he figures they can fetch $50,000 to $100,000 each.

With the emergence of free-spending, nouveau riche collectors from mainland China, the Chinese art market is at the start of what may be an extended boom. Buyers are snatching up everything from 3,000-year-old bronze vessels to avant-garde paintings by Chinese-born artists living in China and abroad. Ever since more than 50 Asian bidders, many from China, showed up at a seminal September, 2003, sale of Chinese rarities at the Doyle auction house in New York, prices have been surpassing estimates. Some examples: At this fall's Hong Kong sales, a 1947 ink scroll by the painter Fu Baoshi, who died in 1965, sold for $1.1 million, four times as much as Sotheby's predicted. On Nov. 17, London dealer Giuseppe Eskenazi, who often buys for European and American collectors, paid a record $5.7 million for an 18-inch early Ming Dynasty dish at a Bonhams & Butterfields auction in San Francisco.

Art collecting was one of the "bourgeois" activities purged in the 1960s and '70s during the Cultural Revolution, but it has flourished under recent economic reforms. Dozens of art auction houses have sprung up in China in recent years, the most prominent of which is China Guardian in Beijing.

Experts expect prices to continue rising as China's wealth grows. "The Chinese don't understand why there's such a big price difference between Western art and the greatest Chinese art," says Henry Howard-Sneyd, Sotheby's Hong Kong-based managing director for China and Southeast Asia. For instance, while a Picasso painting sold this spring for $104 million, works by Zhang Daqian, who lived from 1899 to 1983 and is known as "China's Picasso," usually top out at about $1 million. Chinese collectors figure Zhang's paintings should eventually approach Picasso's level.

Is it too late for smaller collectors to dive in? "Oh, God, no," says David Tang, the Hong Kong entrepreneur and art collector who argues that the rise of the Chinese art market "is just beginning."

Before you make any purchases, there are a few things you should know. It's important to buy through reputable dealers. Fakes and copies are rife, particularly of classic paintings and furniture, and even the experts can be fooled. If you're buying within China, stick to recent works. It's illegal to export paintings and artifacts dating before 1949.

One way of approaching the market, says Theow Tow, New York-based deputy chairman of Christie's Americas, is by "looking for categories where mainland Chinese haven't started buying yet but probably will." For instance, Qing-era (1368-1644) and Ming-era (1644-1911) ceramics have soared, in part because Asian buyers most prize later works connected to the Chinese emperors. But experts say Song Dynasty (960-1269) ceramics remain relative bargains. A small 13th century Song Dynasty bowl went for $2,390 at Christie's in Hong Kong on Sept. 21.

CROUCHING RABBIT
Works in stone and pottery from the Han (206 B.C.-220 A.D.) and Tang (618-907) periods remain comparatively cheap. For example, Eskenazi has a small stone Tang-era sculpture of a crouching rabbit on sale for $23,000. Chinese furniture with imperial connections commands a huge premium: A Qing Dynasty bed made from exotic hardwoods went for $847,500 at a Christie's sale in New York in September. But older softwood pieces with no imperial associations sold for as little as $5,000. Some small collectors specialize in Chinese snuff bottles, which sell for $2,000 on up. Check out Christie's snuff bottle sale in March, 2005, and the selection of London dealer Robert Hall at www.snuffbottle.com.

You can also find bargains in China's far-out contemporary art. Prices for the best known artists, such as 39-year-old Zhang Huan, have soared to $40,000 and up. Zhang, who lives in New York, often uses his own body as a canvas and sells photographs of his work. But many promising artists remain affordable. A top pick of Kent Logan, a retired securities executive in Vail, Colo., who owns 120 contemporary Chinese works, is 30-year-old Zhao Bo of Chongqing, in south-central China's Sichuan province. His jazzy street scenes sell for $700 to $9,000 or so. Julia Colman, co-owner of London's Chinese Contemporary Gallery, which sells Zhao's paintings, also likes painter and photographer Zhang Dali, 41, who documents the social stresses caused by China's modernization. His pieces start at $6,000.

If this art appeals to you, start thumbing through catalogs, visiting galleries, and studying Web sites of galleries and important shows. Dealers with expertise in Chinese art include Eskenazi Ltd. (eskenazi.co.uk) and J.J. Lally in New York for classic ceramics and pottery; Kaikodo in New York (kaikodo.com) and Alisan in Hong Kong (alisan.com.hk) for traditional paintings; and Chinese Contemporary (chinesecontemporary.com) in London, Ethan Cohen Fine Arts in New York (artnet.com/ecohen.html), and the Hanart gallery in Hong Kong (hanart.com) for avant-garde pieces. If you see something you like, don't dally. As Jim Eccles discovered, prices are rising as we speak. - By Thane Peterson BUSINESS WEEK 27 Dec 2004

Chinese contemporary art is emerging as one of the fastest growing investments. Charles Saatchi in London appears to be one of the world's largest player recognizing the enormous pool of young talent in China and setting prices. We are achiving a few articles on topics that appeal to us. - Hello! Tai Tai

China: Cultural Evolution

Contemporary Chinese works adorn the walls of savvy collectors from Manhattan to the mainland.

When the auctioneer's gavel went down at a Sotheby's sale in Hong Kong in April, an anonymous Asian collector had bid more than $3.6 million for an oil painting entitled Pink Lotus by Chinese artist Chang Yu, a record for modern Chinese art. That sale -- at more than four times the expected price -- was no freak occurrence. Prices for contemporary works by Chinese artists have been skyrocketing as connoisseurs both domestically and abroad have been snapping them up.

Such sums might seem modest next to the $95.2 million paid for Picasso's Dora Maar au Chat in New York this spring. But there's no denying that collectors worldwide are getting excited about China. ``The art is approachable for the Western eye and has an immediacy to the Westerner with an interest in China,'' says Henry Howard-Sneyd, managing director for Asia at Sotheby's. ``It's an exciting, hip, and cool place to be collecting.''

China's new contemporary works aren't just adorning the walls of Manhattan apartments. Newly minted mainland millionaires are loading up, too, helping to double or triple prices in the past 18 months. Gu Wenda's 12-ft.-by-4-ft. ink paintings, which sold for $35,000 18 months ago, now fetch as much as $150,000, while paintings by Paris-based Yang Jie Chang have zoomed up to $100,000 from $30,000 or so.

Some of the most popular pieces are by the first generation of avant-garde artists to emerge after the end of the Cultural Revolution. Yue Minjun, who paints laughing figures with oddly uniform teeth, and cynical realist painter Fang Lijun, whose trademark bald-headed portraits are widely imitated, have garnered a huge following. Feng Zhengjie's Andy Warhol-inspired portraits of Mao now sell for as much as $62,000, more than triple the price 18 months ago.

Some argue that commercial success has discouraged artists from taking risks and trying new styles. ``A tremendous number of artists find a formula and stick to it,'' says Elisabeth de Brabant, co-director of Art Scene Warehouse gallery in Shanghai. But other strong selling artists, such as Zeng Fanzhi (whose influences include Francis Bacon) and Zhang Xiaogang (best known for his ethereal portraits based on old photographs), continue to stake out new ground.

Is the market getting overheated? Not yet, say experts, who point out that Chinese artists still look cheap when compared with their Western counterparts. But that gap will steadily narrow as increasingly affluent Chinese collectors buy works by their compatriots. ``In 10 years the most expensive work of art [in the world] will be Chinese,'' says New York dealer Michael Goedhuis. ``It's a matter of national pride.'' - by Frederik Balfour in Shanghai BUSINESS WEEK 5 June 2006

The Artful Investor
New research calls art a smart investment, but skeptics point to high costs and high risk

John Morrissey hunts young artists the way some money managers dig for undiscovered stocks. In the evenings the West Palm Beach (Fla.) attorney scours magazines such as Artforum and Web sites such as Artnet. He tours galleries in New York and Miami, chatting up dealers and sometimes the artists themselves. Buying works early can lead to spectacular returns. In 1998 he bought a piece by abstract painter Cecily Brown for $11,000 at her second show, at New York's Deitch Projects, a gallery. Last year, he says, a similarly sized piece from the same show sold at auction for $968,000. "My artists have outperformed any other investment I've made," he says.

Art is hot. The record price for a single painting was broken three times last year. The auction houses Christie's, Sotheby's, and Phillips de Pury sold a combined $1 billion worth of contemporary art last fall. Attendance continues to surge at art fairs such as December's Art Basel Miami Beach and February's Armory Show in New York. The common explanation is that a new breed of collector, the hedge fund manager rolling in money and looking to show off newfound wealth and sophistication, has hit the scene. There is another factor at work, however: the belief that art is an asset class that belongs in your investment portfolio along with stocks, bonds, and real estate.

The leaders of this new art-as-asset school are Jianping Mei and Michael Moses, two longtime professors at New York University's Stern School of Business. In 2002 they released a study that found art handily outperformed bonds and Treasury bills going as far back as 1876. Based on their most recent results through June of last year, Mei and Moses conclude that art narrowly edged out stocks over the past 10 years, returning 8.5% annually. Contemporary art--which they define as anything since 1950--did even better, returning 12.7% over the past 10 years, three percentage points better than stocks.

The pair founded a consulting firm, Beautiful Asset Advisors, to sell their research to investors. Moses says that because their studies show a low correlation between the performance of art and other assets, art can be used to diversify an investment portfolio. He suggests an allocation of roughly 10% for investors who have at least $500,000 in financial assets, after debt. "We try to be quantitative," he says, "and get the war stories and folklore out of it."

Mei and Moses were not the first academics to examine art as an investment. Over the years dozens have done so, and their results vary widely. Most concluded that art performs poorly. In one of the most cited works, then Princeton University economist William Baumol reported in 1986 that art delivered a return of just 0.55% per year between 1652 and 1961.

Moses argues that his research is more comprehensive than past attempts. Baumol looked at just 640 sales over a 300-year period. Mei and Moses track sales in a database that now approaches 10,000 transactions. The professors only count works that have sold at least twice at one of the major auction houses. By focusing on repeat sales of the same piece, they hope to account for the fact that works, even by the same artist, aren't identical.

Other compilers of art data use different approaches. London-based Art Market Research also uses results from the big auction houses. The firm lops off the top and bottom 10% of prices under the theory that outliers unduly influence the averages. Its contemporary art index shows the category returning 8.7% over the 25 years ending in 2005, which is about four percentage points per year below the contemporary art returns from Mei and Moses. Whichever method is used to calculate returns, it's dicey for investors to count on a similar return, especially if they're buying works of unknown or even up-and-coming artists.

Nearly all of the research into art as an investment concludes that it is riskier than stocks. In a study published last year, Merrill Lynch & Co.'s chief investment strategist Richard Bernstein found that while the probability that an investor will lose money in stocks, bonds, or real estate declines sharply the longer it is held, the chance of losing money in art remains high. Over a five-year period, an investor has a roughly 1 in 6 chance of seeing an art investment decline; for the Standard & Poor's 500-stock index, it's 1 in 10.

There are other drawbacks. It's far more difficult to get the same level of diversification in art that you would from mutual funds, which can contain hundreds of stocks. Commissions to buy or sell art at auction or through a dealer can easily top 10%, far higher than what you pay a stockbroker. Liquidity is poor. Even in hot markets, many items fail to sell at auction. There are transportation and insurance costs. If you're lucky to have long-term capital gains, art work is taxed at the full 28% rate, vs. 15% for securities. Dividends? They are limited to the enjoyment you get from looking at the work.

Over the years several entrepreneurs have tried to put together mutual-fund-like pools to make art investing easier for the small fry. Many have quietly gone out of business because they couldn't raise enough money from investors. Moses has an explanation for that. "One of art's great beauties is that it's fun to collect," he says. "If you put money into art, you want the fun of chasing after something."

Even Moses likens the current runup in contemporary art to the dot-com bubble. After a similar period of art inflation ended in 1990, he notes, contemporary-art prices fell by 50% over the next five years. It took a decade for paintings by the likes of Keith Haring and Julian Schnabel to bounce back, according to Artnet. Baumol, who now has offices in the same building at New York University as his art research rivals Mei and Moses, remains unconvinced of art's long-term investment potential. "There are periods when art becomes fashionable and pays off," he says, "but it's not a consistently good investment." - By Christopher Palmeri BUSINESS WEEK 12 March 2007

HONG KONG - A man stands in front of a painting by Chinese painter Zhang Xiaogang entitled 'Boy in Pink', during a Christie's auction preview in Hong Kong yesterday. The painting will sell at an auction in Hong Kong on November 26, and is estimated to be valued at between US$385,354 and US$513,789. - 24 Oct 2006

Reshaping Contemporary Chinese Art

Christie's in tie-up to be first to hold auctions in Beijing
House to license its name and oversee auction process

(NEW YORK) Determined to be the first Western auction house to capitalise firsthand on China's booming art market, Christie's has signed an agreement to conduct auctions in Beijing, company officials said. And to meet Chinese government restrictions on foreign businesses holding auctions on their own, it has teamed up with a newly formed Beijing auction house called Forever.

Poised for growth: Chinese contemporary art is one of the fastest-growing segments of the Chinese market.

Under the agreement, settled this week, Christie's will license its name, provide experts and oversee the entire auction process, from the acquisition of works for sale to the printing and design of the catalogue. Its first sale - 45 examples of modern and contemporary Chinese art - is scheduled for Nov 3 at the Great Wall Sheraton Hotel in Beijing and is expected to bring US$10 million.

'It's important for us to put down stakes and let people know we've arrived,' said Edward Dolman, Christie's chief executive. 'This is a huge market and we're building on the tremendous sales in Hong Kong.'

In May and June, Mr Dolman said, Christie's sales in Hong Kong totalled nearly US$130 million and attracted 4,500 people a day. They came to view everything from classic Chinese ceramics and jade jewelry to modern and contemporary painting.

The number of moneyed collectors in China is growing as fortunes are being made in construction, technology, manufacturing, real estate and other industries. According to figures published by China's 10 leading auction houses, sales have risen from less than US$100 million in 2000 to about US$1 billion in 2005.

China is not a new territory for either Sotheby's or Christie's. Both auction houses opened offices in Shanghai in 1994 to identify property to sell and to contact prospective buyers. Two years later, Christie's opened an office in Beijing. Sotheby's has had a representative there for the past year. As for Hong Kong, Sotheby's has been holding sales in the former British colony since 1973, and Christie's since 1986.

Year by year, the number of Asians buying at auctions is increasing. Executives at Sotheby's report that in 2004 its Asian clients spent more than US$275 million at its salesrooms around the world, up from just over US$100 million in 2003.

Asian artworks are also becoming more popular and expensive. In July, Christie's set a record for an Asian artwork at auction when a London dealer bought a 14th-century blue-and-white jar for US$27.7 million.

Now Christie's and Sotheby's are focusing on how best to capitalise on the Chinese market. But while Christie's has entered an agreement with a Chinese partner in Beijing, Sotheby's is taking a more cautious approach.

'We're putting out feelers and will be watching Christie's closely to see what we can learn,' said Henry Howard-Sneyd, managing director of Sotheby's in Asia and Australia. 'But since holding auctions in China has to be done through intermediaries, we will see how things develop.'

Mr Howard-Sneyd, who is based in Hong Kong, added that the company's staffing throughout Asia was increasing by 15 per cent to 20 per cent. 'The Chinese love fine wines, jewelry, Western furniture, 19th-century paintings as well as contemporary Chinese art,' he said. Chinese contemporary art is one of the fastest-growing segments of this market, attracting buyers from around the world. Sotheby's is planning to hold its first sale of contemporary Chinese art in March, during Asia Week in New York.

Xiaoming Zhang, the expert in charge of the sale, comes to Sotheby's from the Guggenheim Museum, where she helped organise its giant show 'China: 5,000 Years' in 1998. She was later part of a Guggenheim team exploring possible satellite programmes around the world. Ms Zhang is now travelling through China looking for property to sell. 'It's not easy,' she said in a telephone interview. 'The demand is far greater than the supply.'

Chinese contemporary artists generally fall into two categories: in the first group are those whose style is based on traditional Chinese images and forms, like ink-wash landscapes, harking back to the 17th and 18th centuries. One example is Wu Guanzhong, who produced 'White Poplar Woods', a modern twist on a densely painted forest that is expected to sell for US$770,000 to US$900,000 at Forever/ Christie's next month. Another is the artist Lin Fengmian, who studied in France and has painted scenes like 'Opera Figures', a scroll estimated to fetch US$154,800 to US$232,300 next month in Beijing.

The second category consists of an important group of Chinese artists whose work is based in Pop and conceptual art and who have a wide international following. Sotheby's plans to sell their work in New York in March. This group includes the conceptual artist Huang Yongping, the subject of a retrospective at the Walker Art Center in Minneapolis on view through Jan 15. - NYT

Secret Codes: The Art of Hon Chi-Fun

Sai Kung, 1961, Artist Collection

The 60 paintings by Hon Chi-fun at the Hong Museum of Art confirm the 81-year-old as one of China's most important living painters. He is credited as the first painter to meld traditional Chinese calligraphy with modern techniques, such as pouring, screen-printing and collage. He has also written calligraphy with oil and airbrush, instead of ink.

While Hong Kong is famous as a meeting point for the Orient and Occident, artists only combined the two cultures in the 1960s. Largely self-taught, Mr Hon's exposure to the west began during a year studying in New York. He later befriended Mark Rothko and Henry Moore. Although a western aesthetic has shaped his work, Chinese traditions clearly loom large.

Hong Kong Museum of Art, Special Exhibition Gallery 1, 2nd floor, 10 Salisbury Rd, Tsim Sha Tsui. Open: daily 10am-6pm (closed Thurs). Tel: (852) 2721 0116.

CHINNERY ePostcards

Much of China's contemporary art scene is based in Beijing - but recently, artists from Shanghai have been attracting major attention.

Exhibitors at the Shanghai Biennale art museum, started in 1994, are becoming increasingly influential and many curators based in Beijing and overseas are now becoming more interested in Shanghai artists.

"People are coming by now - there are museums, so it's better," Lorrenz Hebling, the curator of Shanghai Biennale, told BBC World Service's The Ticket programme.

"A few years ago, people saw Chinese are as tourist art, not serious. Now it's surely better - people are starting to remember the names of the artists, they're writing them down. They didn't do that before."

Freer to experiment

The city's art centre is in a warehouse district in Old Shanghai - one of the few areas of the city that has not undergone massive transformation in recent times.

The Shanghai Biennale is the centre for the contemporary art scene in Shanghai, with up to 40 studios working around it.

The gallery's works tend to be on the large side - one is a five-metre high picture of a screaming face; another features a large number of small terracotta figures climbing over each other.

Chinese art had begun to attract international interest in the 1980s, until the Tiananmen Square protests of 1989 were dramatically put down by the government.

This ushered in a period of conservatism amongst Chinese artists. But now they are feeling freer to experiment again.

"When I was in school, China was quite closed," said Zhou Tiehai, a Shanghai-based artist who exploits both Western and Chinese traditions in his works.

"As a young artist, we didn't have a lot of chances.

"During that time, exhibitions would be closed by the police."

Tiehai has swiftly become very collectable, and known to art critics worldwide.

His most famous works include superimposing his face on Western magazine covers, and a portrait of former New York mayor Rudolph Giuliani as a heroic Mao-type figure - with two balls of dung beneath.

Tiehai said he welcomed the attention from foreign collectors and art experts.

"In the early 1990s, artists didn't have a chance to show abroad," he added.

Shen Fan, described as the leading abstract painter in Shanghai, said the artistic boom in Shanghai had been incredibly rapid.

"Before, in China, art was not noticed," he said. "Now it is just a job, like a teacher."

Shen Fan experiments with traditional Chinese forms such as calligraphy and tries to change them into something more abstract.

"Some years ago, I had an exhibition in Germany - they asked me if my painting fitted in the Chinese traditional culture," he added.

"But my friends in China don't think so."

Diluting art?

This is an important point about modern Chinese art - and what concerns some critics who feel that Chinese artists are sacrificing tradition to attract a Western audience.

Zhou Tiehai's most famous works, for example, involve superimposing Joe Camel, the cartoon face of Camel cigarettes, onto images such as nude models.

"A lot of people use the symbols, like Mao and the cultural revolution," he told The Ticket.

"I think that's too easy - so I decided to use Western images."

But he dismissed claims that Western success diluted Chinese art, comparing it to football.

"A Brazilian player can play well for a football team that plays in England," he argued.

"It does not make much difference [to his performance] if he is from Brazil or from England."

And Ludovic Bois, of the Chinese Contemporary Gallery in London, said that certainly in England the hype about Chinese art is being overlooked anyway.

"The English are not really there as big collectors," he said. "They are missing the boat.

"The media has not really been covering this very well... most of the buyers are from Europe and America, and the English are not quite there." - BBC 11 March 2005

Art of getting richer
It's true, the rich really do get richer. Three years ago, a private collector went to Christie's Hong Kong and bought Emperor Qianlong's Review of the Grand Parade of Troops, a classical painting from the Qing dynasty. He liked art, had a few dollars to spare, and took the painting home after paying HK$16 million for it.

The 15-metre scroll, one of only two in the world, turned out to be rather too big for any of his dwellings. Too bad, he thought. I'll resell it. So it was back to Christie's in April, where his too-big painting fetched a staggering HK$26 million, a world auction record for a Qing Imperial painting.

Stories of high-brow glamour and unexpected investment returns like these look too spectacular to be true, but they do happen, and are happening around us. As Chinese economic power surges and Chinese influence increases worldwide, the value of Chinese art is also reaching new heights in a market still largely untapped.

In Hong Kong, where the stock market rules and where some of the world's richest people have built their piles, it is curious that so few have looked at art as an investment tool. That may have changed last month - when art mavens and neophytes alike gaped incredulously when Boy with a Pipe, a 1905 work by Pablo Picasso, sold at auction in New York City for US$104 million (HK$811.2 million), the highest price ever paid for a painting and nearly double the master's previous high of US$55 million. The previous record for a painting was US$82.5 million for Vincent Van Gogh's Portrait of Dr Gachet at a Christie's auction in 1990.

While most people are aware of the sales cachet of Picasso and Van Gogh, a lot fewer are aware that the demand for Chinese paintings, while not yet in the league of these masters, has steadily gained momentum since the late '80s. In less than 20 years, prices for these treasures have climbed with astonishing speed. A dramatic growth in the auction market took place in the late '80s and early '90s, dipped slightly after the mid-'90s but has gone from strength to strength ever since. It has most definitely picked up pace in recent years.

``The market is vibrant, perhaps at the strongest it has ever been,'' says CK Cheung, senior director and head of Chinese painting at Sotheby's Hong Kong.

The sale of the Qing Imperial scroll was phenomenal, but recent pieces are not doing badly, either. Two years ago, Sotheby's Hong Kong sold modern master Zhang Daqian's Crimson Lotuses for HK$20 million, a world auction record for a contemporary Chinese painting.

``The prices are coming up across all fronts - be they classical, modern, contemporary,'' says Raymond Sun, vice-president and specialist of the Chinese painting department at Christie's Hong Kong. ``We are certainly a long way from the price levels of those Western masters. It takes time, but the prices for Chinese paintings will - and should - continue to go up.''

Cheung agrees. ``There is no doubt that the gap between the prices for Chinese and Western paintings have narrowed rapidly in recent years,'' he says. ``If the difference was on a scale of 1 to 10,000 in the past, these past 10 years have seen the margin narrowing to around 100 to 10,000.'' He believes that the future for Chinese paintings is ``very promising''.

``The value of art is governed by its own cycles of market fluctuations, just like shares and bonds,'' says Cheung. ``But it is also often directly proportional to general economic trends. The fact that the Chinese economy has grown progressively stronger in the past 10 years is reflected in the auction market as much as anywhere else.''

Back in the '80s, notable pieces often sold for less than HK$2 million, according to Sotheby's. Kwok Ho-mun, founder of the local Wan Fung Gallery and its branches in Beijing and Guangdong, says that one work leapt from HK$1,500 in 1988 to HK$50,000 in 2001 - a 30-fold increase.

Such a development is only natural, he says, considering how traumatic the last century has been for Chinese art. ``China has suffered a great deal in the last century - people hardly had money to fill their stomachs, let alone care for culture. Five thousand years of traditional Chinese values and culture went to the dogs, particularly during the Cultural Revolution. In the period immediately after the revolution you could have bought a handful of modern masterpieces with a Japanese TV set or fridge.''

Kwok, who is also the author of a book on collecting and investing in Chinese paintings, repeatedly stresses how modern Chinese art, in particular, still has a lot of potential for development and is generally grossly undervalued and under-appreciated. ``Modern Chinese artists have a very different outlook and exposure, a much wider vision. They are very receptive to foreign art, while at the same time they are also widely acknowledged in international art circles. Many have held international exhibitions. Before, what Chinese artist would even dream of leaving his native country?''

Against the odds of the economic crisis a few years back, his gallery has made good money in the past few years. ``There is no doubt that prices are on the rise,'' he says, ``But you could buy up all the Chinese masterpieces within the last century for the price for two Picassos, or four Boeing planes.''

One reason for the late development of auction interest in Chinese paintings is doubtless the relative lack of exposure in the international auction scene. Outside Asia, enthusiasm has traditionally been more focused on Chinese antiques and artworks such as Imperial porcelain, jade, and hardwood furniture than on paintings. A Qing dynasty vase could easily fetch HK$15 million, and an important bronze jar came with a price tag of as much as US$9 million at a Christie's New York auction in 2001.

Cheung explains that this might have to do with the fact that understanding paintings requires more expertise and knowledge of Chinese culture and history. ``Appreciating an ornamental object is much easier for a foreigner,'' he says.

Sun agrees: ``Western and Chinese aesthetics are so different that for the untrained eye, it's hard to appreciate Asian art as much more than just `exotic'. People go for decorative value and stop there.''

Collector-investors in Asia thus dominate the market. Though both Christie's and Sotheby's sold Chinese paintings in New York, both houses have now strategically decided to concentrate Chinese painting auctions in Asia because the art is mostly bought by Asians, ``just as Impressionist art is mostly bought by Westerners - it's the most natural thing in the world,'' says Cheung.

In fact, both auctioneers say bidders from the mainland have invaded the field and are spurring the boom in auction prices. Sotheby's said mainland bidders were ``definitely rising in number''. Christie's reported ``frenzied bidding'' and a ``strong presence of buyers from mainland China willing to pay high prices for the best items on sale'' in their spring auction. Last year, Christie's saw mainlanders make up 40 per cent of bidders for a show of classical paintings.

Even the West is raising its brows at this surge of newcomers. According to American and British media, these apprentice collectors are also popping up at New York and London auction houses. One story of a previously unheard-of eel farmer from Ningbo in Zhejiang province, who walked out of a New York auctioneers with five big buys - one of them a US$321,100 Ming vase - made it into The New York Times and the British newspaper The Observer.

``The Chinese are getting rich now and, like the wealthy all over the world, they will inevitably start chasing after a quality life and pursue art and culture with their wads of cash,'' says Kwok.

Adds Sun: ``Buying paintings is the perfect way for the Chinese nouveau riche to show they are cultured. They are looking outside China in an attempt to reclaim their culture and history.''

However, while mainland Chinese made their presence felt in the auction rooms, they did not put up the winning bids in many cases. ``The record prices this spring at Christie's were largely a result of eager mainlanders hiking up the prices, but many hesitated towards the end and so failed to secure what they wanted. After all, they are less experienced and sophisticated than their Hong Kong and Taiwan counterparts,'' remarks Sun.

Hong Kong art aficionados can stay composed for the time being, but in the long term it appears that China will likely out-number local competitors with its fast gathering fan base. ``In Taiwan and many Chinese cities, big companies like to dabble in art to strengthen their corporate image, and municipal governments set up their own collections,'' says Kwok. ``Hong Kong is a unique place when it comes to the lack of commercial interest in paintings.''

Which is a shame, because the SAR has advantages over any other Asian city. ``Hong Kong has always been an important Asian base for Chinese art: Its defining advantage is its enticing tax policy. Other places in Southeast Asia have a lot of import barriers compared to Hong Kong.

``Buying paintings is still not a big thing here,'' continues Kwok, estimating that of the people who can afford to buy art in Hong Kong, only 5 per cent do so. ``Hong Kong's wealthy are too busy to visit galleries and the local art scene doesn't provide much incentive. Most galleries here are pretty small because it's so very difficult to run a gallery with the ridiculous rents. Who'd bother making time to go to a gallery to find only a few paintings to choose from?''

It looks as if those interested in venturing into this alternative investment avenue should be armed not only with disposable cash but also patience and a willingness to do lots of homework.

They should also keep in mind a prime rule of art collecting anywhere: ``You have to love art,'' says Sun, ``If you are not able to look at your painting everyday without thinking `has its price gone up today?', forget it.'' - by Sylvia Hui WEEKEND STANDARD 12 June 2004

Artful insurers sense deals as the rich get richer

The rise of China's nouveaux riches has boosted demand for fine art and antiques insurance, as the world's most populous country develops a taste for the trappings of high culture.

Noting the trend, AXA Art, a unit of French insurance giant AXA Group, has started promoting artwork policies in Hong Kong.

China has yet to open up the arts insurance market to foreign players but mainlanders can buy policies in Hong Kong that offer full coverage for their collections anywhere in the world.

"We believe there will be a lot of business opportunities in Hong Kong, China and Asia as a whole," said Dietrich von Frank, president and chief executive of AXA Art.

Mr von Frank said his firm would market the cover to private collectors and operators of museum and exhibitions.

The art insurance markets in the US and Europe have matured, he said, while those in Hong Kong and China offered steady growth. Hong Kong-based Chinese painter Lee Chakman said the arts trade in China had grown over the past few years.

"The art investment market grows with economic activity. Wealthy people in China like to collect paintings to show that they are not just money-minded businessmen, but also have knowledge in culture," Mr Lee said.

It was also increasingly popular in China to give paintings by famous painters as goodwill gifts to business partners and government officials, he added.

Britain-based Lloyds' Hong Kong representative Cameron Murray said his firm was also keen on serving China's expanding art market.

"Lloyd's has a long history of providing high net worth and fine art insurance for clients around the world," Mr Murray said.

"As the Chinese economy continues to grow and attract more foreign investment, our underwriters will be well placed to advise clients on the best coverage for their risks."

Insurance industry sources said most museums and galleries in Hong Kong and China had insurance cover. However, only 10 per cent of Hong Kong private collectors had cover, and the figure is even lower in China.

Henry Au-yeung, director of art dealer Grotto Fine Art, said private collectors usually did not buy insurance because they did not generally regard the paintings as investment. "Only about 20 per cent of fine art buyers are purchasing for investment purposes," he said.

"For those who purchase paintings for their own collections, they seldom think of insurance, as compensation would not mean anything to them if they lost the paintings they love." - by Enoch Yiu SOUTH CHINA MORNING POST 27 July 2004