First, let's tackle the reasons behind this rumor. Obviously reason number 1 is that the Chinese contemporary art market has never faced a downturn before. For many years the art scene was hot but the market was not. That all changed in about 2003, when leading Chinese artists were holding exhibitions around the world, and they started to garner higher auction prices and attract big name collectors. Then, domestic Chinese investors, pockets full of hot money with nowhere to put it, started playing the game, and the market exploded. For a while it seemed that if any artist could reasonably argue Chinese heritage, he could add an extra zero or two on his pricetag. Now that this isn't the case, people are reasonably freaking out.
Reason number 2 is a lack of transparency. There are no publicly listed galleries out there, and many of them work on an almost exclusively cash basis. The only way to take a peek at the market is through the small, highly distorted lens of auction results, which represent but a fraction of the transactions going on. Auctions haven't been doing well recently.
Reason number 3 is the one that is feeding the mainstream rumor mill. Last year, when the market was full of euphoria, the 798 art district was chock full of galleries, and every weekend the place was mobbed with people. Galleries averaged a new show once a month, and even mediocre artists could expect a dozen group exhibition opportunities and three solo shows a year. Now the place is empty, new openings are rare (bad news for the free booze schmoozers), and a lot of places haven't been open for a while. So everyone who strolls through there says, gee, this place has tanked.
As an aside, there was a lot of badmouthing going on about 798 last year. People said it was too commercial, too simplistic and too noisy. Most of those accusations are correct, but I think most of the detractors were secretly (or subconsciously) angry that the place had made art so accessible to the public. The loudest complaints were heard from art communities way out in the outskirts of Beijing, impossible to find by outsiders. For political reasons, Chinese contemporary art did much of its development beyond the prying eyes of the public. I for one think that art should engage the broader public, but what do I know.
Back to the topic, what's really going on out there? To be frank, things are bad. One of China's most prominent private collectors put it to me this way: "basically, western collectors started buying, expecting a newly affluent China to one day pay top dollar to buy back all their art. Chinese collectors started buying in hopes that they could sell it to western collectors for lots of money. Now the music is stopped, and no one wants to foot the bill". There was a lot of speculating going on, and it was full of irrational expectations based on past performance. Back in the '80's, artists would sell great paintings for a few hundred dollars to pay the rent. Some of those paintings have garnered hundreds of thousands in recent auctions, with better specimens breaking the million dollar mark. Based on that expectation, the painting I spend several thousand dollars to buy from a mid-range artist today should be worth hundreds of millions in 2020. Seriously, guys, did you really stop to think this through?
So let's sift through what we actually know. Yes, galleries have closed, but it's impossible to tell which ones have gone kaput, and which ones have cancelled some exhibitions to cut costs. Of the ones I can confirm, the closed galleries were all either newcomers or just businessmen out for a quick buck. The real pros are still around. Second, auction prices are down, but they're not falling through the floor. This makes sense. Much of the auction heat was stoked by all the new money floating around, namely finance and natural resources. So it makes sense that auction prices have taken a hit.
But I still feel that all of the rumors are overblown. Writer Xia Yanguo broke it down pretty well in a recent article on artnow.cnHe brings up a point that many others have ignored - that winter is a really slow season anyway. I think that galleries are cutting costs, and taking an opportunity to give out all those vacations their employees piled up during the last two cutthroat years of 24 hour workdays. This mirrors my recent experience. All last year we were working at over 100% capacity to provide translation for our slice of the art market, and then saw a major slowdown after the first poor auction results in November, and an almost total halt at the end of the year. Then, like magic, my inbox began to fill up two weeks ago. One day, nothing, the next day, five new jobs. The galleries (luckily I deal with the serious ones) are all gearing up for spring season with its festivals, expos and spring auction offerings.
So while I'm not totally optimistic about the 2009 season, I think things will be okay. Here's what I expect to see: less exuberance at the spring auctions, but also more conservative offerings; a weeding out of flighty speculators; a culling of the expos (way too many of those last year if you ask me); and finally, some more professionalism among galleries and collectors. China is and will continue to produce a lot of great art, but there was a bit too much in recent years.
Some artists with good ideas simply made or sold too much of their work (seems Zeng Fanzhi dodged that bullet). Over-eager collectors jacked up prices for mediocre work, and allowed for a blossoming of the counterfeit trade. Some galleries, pumped up by seemingly limitless market demand, spent a lot of money on flash and not a lot of time cultivating their collectors or budding new artists. All of these people need to take a closer look at what they're doing, and hopefully a more professional class of art people will emerge.
So what am I looking forward to this year? I'm looking forward to a lot of things. One, I'm definitely planning on expanding my chunk of the market. Two, I'm hoping that all those Yunnan artists who flocked to Beijing in recent years will come back, and that we can start having fun down here again. Three, I'm hoping for the Chinese art scene to do some growing up. Besides, scars give you character...