Overseas Chinese Painters - Most Stable Proposition on the Current Art Auction Market
Spring Auctions Against the Backdrop of the EURO Crisis
Doubts over the European sovereign debt crisis continue to hamper the global economy in 2012, dampening investor confidence and slowing worldwide growth. Consumption of general goods is contracting palpably as we are entering another recession. These developments have not remained entirely without repercussions on the art auction market. In the current year, auction houses are facing considerably increased difficulties in maintaining turnover, with total sales showing a marked downturn over the previous year. For example, for this year’s spring auctions, the Hong Kong branches of Sotheby’s and Christies reported a revenue reduction of 31% and 32%, respectively. Ravenel, however, has been expanding business operations this year and managed to ward off the worst effects of the bearish market: our Hong Kong and Taipei gross turnover fell by only 9%.
Then again, were the auction results really all less than ideal? The truth is that the prices for high-end items remain fairly stable even in times of economic downturn, in particular when we are talking about rare or hard to find works of art—here we notice an increased willingness to put lots on the market. On May 2 this year, Norwegian painter Edvard Munch’s pastel “The Scream” sold for nearly US$120 million (about NT$3.5 billion) at a New York auction. That lot represents the only edition of this work held in private hands, and the sale, making “The Scream” the most expensive work of art ever, immediately attracted global media attention.
So, can the trends of the art market offer an accurate reflection of the overall economic situation? Not necessarily. The art market is a unique and extremely complex field, a fact that even economists cannot and do not deny. Benjamin Mandel of the US Federal Reserve Bank, who spent many years studying the art marked, once said, Fine art is not really part of the overall global economy. Instead, it’s part of the economy of a small subset of the super-superrich, whom some economists call Ultra High Net Worth Individuals, or U.H.N.W.I.’s. And their economy, unlike ours, is booming.
Mandel was talking about the high-end art market, the very tip of the economic pyramid, and only the super-superrich have the financial muscle to participate in this segment. “The Scream” is one of the most recognizable artworks in existence, often reproduced on posters and in magazines, and for sheer iconic power it can rival even Da Vinci’s “Mona Lisa.” All this puts it well out of reach for the average art collector and connoisseur. During his life, Munch painted a total of two oil paintings and two pastels on board titled “The Scream.” Three of these four works are in the permanent collections of museums, but the one sold on an auction in New York this year is the only one to be in private hands, making it an even rarer and hard to come by item. For the super-superrich, wealth is just a number, and if money can buy you a wonderful and absolutely unique piece of art, then what better investment could there be than a charming painting or an elegant statue? Not to mention the fact that being an art aficionado can earn you a reputation of class and good taste. Such dream works of art will always be in demand, regardless of the periodic fluctuations of the general economy, and this truth of “intrinsic value orientation” only rings truer in times of economic and fiscal uncertainty.
Looking at Asia from a global perspective, and examining in particular the art auction market of China, Hong Kong and Taiwan, the trend towards “intrinsic value orientation” is also immediately apparent. Back in 2008, the global financial crisis brought unprecedented economic problems, affecting the art market to a considerable degree as well. Even the comparatively stable and prosperous segment of Chinese art and art collectors could not wholly escape the fiscal tsunami, and the market entered a phase of consolidation. As the time of huge and quick profits was over, art collecting returned to the basics, and the market for contemporary Chinese art, which had been the most inflated and over-hyped, was affected the most. Some of the first line artists managed to maintain their value while others dropped somewhat, but it was with the second and third line artists that the impact was most keenly felt, or young painters who had only just entered the market after finishing their studies. All these were quickly relegated to the “higher risk” category and lost much of their value as the speculation factor became much less relevant. This clearing made the market healthier and more solid. As a matter of fact, for collectors looking to pick up quality items at a reasonable price, the current relative slump is the best possible opportunity to do some serious shopping.
It is worth noting that Chinese modern art has lately become one of the categories showing a more stable growth, with auction prices setting new records at times when overall sentiment is bearish: for details cf. the updated list “Top 20 Most Expensive Chinese Oil Paintings Ever Sold at Auction.” That list features a total of 12 works of modern art, of which 8 can be categorized as “contemporary art.” In addition, some two thirds of all transaction records stem from the time after the 2008 financial crisis, confirming the tendency of fresh capital flowing into the art auction market
“Chinese modern art” as a specific category of the auction market does not have a very long history, just about 20 years or so. It was in the early 1990s that auctions specializing in oil paintings and sculptures by Chinese artists began to be organized on a regular basis, first in Taiwan and Hong Kong; Southeast Asia and China gradually followed suit. As demand rose and the market grew bigger, labels such as “Western paintings by Chinese artists,” “20th century Chinese art,” “Oil paintings by Chinese artists,” or “Best of Chinese painting” were increasingly used to cover everything from the early 20th century to the 1970s. Of course, sometimes paintings are also categorized according to artistic style. For example, in contrast to much of the “contemporary art” developing after the 1980s, the more recent, abstract output of Zao Wou-ki, Chu Teh-chun and others, as well as works of “Chinese realism” by Chen Yifei, Wang Yidong and others, are usually tagged as “Chinese modern art,” its defining characteristics including a more classically oriented style and an established place in art history—qualities that fairly consistently put these works in a higher price range.
Even though “Chinese modern art” only has an auction history of some two decades, among art collectors this specific market category has already become a synonym for stability. Of course, there have been ups and downs over this period of time, but throughout all the periodic fluctuations the general trend has been, and continues to be, an upward one, with the number of collectors and aficionados also constantly on the rise. It is exactly because the price threshold is higher that a considerable number of collectors consider the market for Chinese modern art to be a future target for their ambitions. Many of the works in this category (including all the ones listed in “Top 20 Most Expensive Chinese Oil Paintings Ever Sold at Auction”) see very little movement in their (high) pricing, and are on the “dream list” of countless collectors.
Chinese modern art is a complex animal, comprising artists and styles from China, Taiwan and overseas. There is quite some overlap among collectors of art from these different sources. Personally, however, I would recommend to focus on overseas Chinese artists with international standing and market power. They have been living and working abroad for many years, their style tends to be more international and modern in its appeal, and their output is well received by globally renowned art agents and collectors. Naturally, works of this kind not only appear in the China, Hong Kong and Taiwan market, but at auctions all over the world. Also, their strong market standing was first built by international collectors, and a significant number of them are now held in the collections of major museums and galleries around the world.
Sanyu, to quote a prominent example, won the praise and support of renowned French writer and art collector Henri-Pierre Roché (1879-1959) and Dutch composer and art collector Johan Franco (1908-1988) as early as the 1920s to 1930s. Both Roché and Franco, as well as many other among his international friends and admirers bought, collected, and traded his works. In 1966, Roché’s widow commissioned the Paris auction house Hôtel Drouot to sell a set of Sanyu’s painting, and most of the artist’s work remained in the hands of European dealers and collectors until about 1990, when Taiwan art dealers and Asian collectors began to acquire and collect his work.
Another Paris-based overseas Chinese painter is Zao Wou-ki, who conquered the world with his expressive abstract art. He began showing his work at major galleries and museums in Europe and North America in the 1950s. His later wife, Françoise Marquet, used to be the director of the Musée d’Art Moderne de la Ville de Paris, further boosting Zao’s connections and growing reputation. Today, the Centre Georges Pompidou is only one of many famous museums boasting numerous of the artist’s paintings in their collection. Zao was formerly represented by a slew of top-notch agents and galleries, including the Galerie de France (Paris), the Galerie Jan Krugier (Switzerland), the Pierre Matisse Gallery (New York), and the Marlborough Gallery (New York). He is also known for his print works, which are distributed across an even wider spectrum of collections. To this day, Zao Wou-ki’s works frequently appear at art auctions in Europe and the United States.
Chu Teh-chun also lived in France for many years of his life, and his career’s trajectory was rather similar to Zao Wou-ki’s. A member of the New Paris School, he soon became a staple presence at European galleries and exhibitions, with his work being shown on many occasions in France, Switzerland, Belgium, Luxembourg, and other countries. In 1999, Chu became the first ever Chinese artist to be made a member of the Académie Française. In the 1950s, he lived in Taiwan for a period of time, working as an educator and marrying the local woman Tung Ching-chao. Even though he spent most of his life in Paris, Chu never lost touch with art circles in Taiwan, and is popular with many collectors on the island, in Asia, and the whole world.
Walasse Ting spent much of his life in the Big Apple and was closely associated with the New York School, but later in his life divided his time between New York, Paris and Amsterdam. His formative years as an artist he spent in Paris, where he was close friends with members of the CoBrA avant-garde movement. Upon moving to New York, he was drawn to pop art and abstract expressionism, associating closely with exponents of these movements. His colorful work soon became very popular with American and European art aficionados, and continues to be reproduced on many posters or as prints. His prodigious output, easily recognizable style and international popularity help explain why his work appears with great regularity at smaller auctions in Europe. Today, Ting’s oeuvre also has a growing following in Asia, especially in Hong Kong, Taiwan and Southeast Asia. Collectors based in China have also begun to show interest in Ting, making this a market with much promise.
The attached charts feature price indexes for the four overseas Chinese artists Sanyu, Zao Wou-ki, Chu Teh-chun and Walasse Ting, covering the period since 1998. A quick glance will show that with the exception of 2008 (financial tsunami), when prices stagnated for about a year, the price curve displays an almost uninterrupted upward slope. It offers an accurate reflection of the price fluctuations an artist’s works experienced during the indicated time period, and the chart also shows the average returns collectors could expect from their investments. Every work of art is of course unique, and while it may in many ways be inappropriate to evaluate them purely as a product with rationally quantifiable qualities, it still provides a good reference for art collectors and dealers wishing to estimate the current market value of specific pieces.
While the four artists Sanyu, Zao Wou-ki, Chu Teh-chun and Walasse Ting may not necessarily hold the records for the most expensive individual items ever sold auction by a modern Chinese artist, yet their overall appeal and number of collectors is probably much larger than that of other painters such as Wu Guanzhong, Chen Yifei, or Xu Beihong. The 2012 spring auctions showed that many collectors have set their eyes on works by Chinese overseas artists, and such works fetched good prices not only in Asia, but also in Europe and the United States; their market is continually going up.
Still, the downturn in the global economy does have an effect, even on the art market, and this manifests itself most clearly in an M-shaped curve: high-end works maintain their value, while low-end pieces also continue to sell well. Sanyu’s oil paintings are rare, precious, and hard to come by, which explains why one of his important prints was sold for as much as NT$1.32 million (about US$40 thousand) at the 2010 Ravenel spring auction in Taipei. More recently, prices for works on paper by Zao Wou-ki and Chu Teh-chun have also gone up significantly—anything with obvious artistic merit and aesthetic appeal will quickly become the focus of collectors’ attention. On the other end of the spectrum, comparatively inexpensive prints have also become best sellers. An example would be grand master Zao Wou-ki’s early lithography “Le soleil rouge” (The Red Sun): some ten years ago, its market value was NT$35,000. In the June of this year, it sold at auction in Taipei for NT$649,000.
Unfortunately, as soon as the market turns bullish, all sorts of art fakers and counterfeiters will try to cash in on the boom. Currently, special care is necessary with regard to sketches by Sanyu. Also, in China one occasionally encounters rather crude imitations of oil paintings by Zao Wou-ki or watercolors by Chu Teh-chun. True, the aesthetic depth and abstract imagery of true masters is not easily copied, and fakes of overseas Chinese artists are usually easily discerned. However, it is still a good idea to buy art only from professional and trustworthy sources so as to avoid losing money and experiencing bitter disappointment.