The author of the latest TEFAF report, Kejia Wu, has seen the birth of the world's most important secondary market from the inside. She reveals her take on it here.
Having grown up in Beijing, Kejia Wu spent a decade developing cultural projects in the Chinese capital. This included founding its first contemporary art centre – before the 798 Art District and UCCA – though unfortunately, it was destroyed some time later. After obtaining an MBA at Yale, she decided to move to New York, where she first worked in the office of the Sotheby’s CEO on special Asia-related projects. In 2015, she began teaching at the Sotheby’s Institute. She was the one who designed and produced the 2019 TEFA report, dedicated this year to the Chinese art market: a fascinating overview in a singular format.
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Kejia Wu Courtesy of TEFAF
How did this report come about?
Patrick van Maris van Dijk, TEFAF's CEO, approached me, suggesting the idea of carrying out a study dedicated to the Chinese art market. Of course I went along with him! But it was clear to me that in view of its "youth", it was crucial to dwell on its history to give a clear idea of its organisation and get an inkling of how it might be in the future. China began opening out to the world exactly forty years ago. And it's only been a member of the WTO since 2001…
So how did the market start up, exactly?
After the Cultural Revolution, the government restored objets d’art that had been confiscated to the people. But the population was still suffering from terrible job insecurity. Many decided to sell all or part of these pieces to improve their daily lives. So the government was able to build up a large stock and train a generation of experts through its antiquities stores. These shops were authorised to sell a few expensive pieces to strangers passing through to finance their acquisitions. One of these stores in Shanghai, Duo Yun Xuan, was inspired by auctions in Hong Kong – and the incredible results they achieved – to set up a similar system in mainland China. A year later, in 1993, it staged its first sale, which was attended by the people who created China Guardian the following year. So it was only in the mid-nineties that an auction market began to put down roots, which then encouraged the development of the art market in general.
And today, how is the auction scene doing in China?
The market literally exploded, reaching a peak – clearly founded on speculation, in part – in 2011. Since then, it has become more effectively structured and has matured. In practical terms, the scope of foreign auction houses is still restricted, as they are not allowed to sell Chinese antiquities and traditional art. When Sotheby’s set up in Beijing in 2012 through a joint venture, it was hoping for rapid change in the regulatory framework. But this has never come about, and I don't think things are likely to change any time soon. Meanwhile, Chinese operators have the right to sell what they like, but they need time to build up teams. They don't lack expertise so much as "specialists" who will go out and look for business, and who know who owns what.
How have galleries developed, for their part?
Chinese contemporary art galleries were still pretty embryonic until quite recently. The first one ever registered, Brian Wallace's Red Gate Gallery, goes back to 1991. ShangART opened in 1996 while Galleria Continua – the first foreign gallery – only set up in 2004, four years before PACE. Then there was a huge rise in new galleries, working up to the peak of 2011, but numbers have been falling off again more recently. So the number of new galleries opening rose from thirty-three in 2001 to three hundred and forty-seven in 2014, dropping back to twenty-four in 2017. Even though collectors are much keener to buy art in galleries than in the past, paradoxically Chinese galleries are having a much harder time than in 2008. This is the result of much tougher competition, particularly from Western galleries, which have been arriving in droves over the last few years, and a globalisation in taste. But new business models are being tried out. For instance, I found the "teamLab" at the PACE Gallery in Beijing in 2017 really interesting from that point of view: nothing was for sale, but people paid to get in [CNY 80: around €10 – Ed.] The result was 400,000 visitors. We think that international galleries will continue to set up in the country. Local brands will need to adapt, perhaps collaborating with their colleagues to survive and develop.
To carry out your study on collectors' behaviour, you seem to have approached the most prominent. Are they representative?
Yes, we collected thirty or so detailed answers from some of the leading collectors. The majority own collections with an estimated worth of over $10 million; one even spent a billion dollars on art works. There are obviously not very many of these collectors, even among very wealthy people. The aim was perhaps not to be representative of all Chinese art buyers, but rather to provide a counter-argument to the fairly widespread idea that they are merely speculators. Once we established that there are a lot of passionate and committed collectors, it was interesting to find out more about their behaviour.
Some have decided to open private museums…
… and others haven't! For instance, Liu Gang, whom we invited to the Symposium, owns over three thousand pieces, and likes to loan works but doesn't want to open a museum. He wouldn't have the time to devote to it. Others, on the other hand, think it's the best way to share their passion. Still others do it so that they can buy more easily. It's true that buying for oneself and for a museum is perceived differently by the big international galleries. But it's very difficult to generalise. Today, there are fifteen hundred private museums in mainland China. We expect that many of them will close down in the long run, as the economic equation simply doesn't work.
The Chinese government seems ambitious as regards access to culture.
Yes: the last five-year plan [2016-2020 – Ed.] wanted five thousand museums to be opened in the country. This figure was achieved with time to spare. In addition, and not many know this, the party wanted free admission for everyone. So Chinese museums received 970 million visitors in 2017 [the total number of visitors in France is around 60 million each year – Ed.]. Often these museums started by building on the collections of other non-museum institutions. However, we lack information and visibility as to current acquisition policies. Even through there are several types of museums – public, national, regional and provincial – they are all financed by the State. They generally feature the traditional arts (painting, ceramics, objets d’art, etc.) with clearly established goals in terms of conservation and research. So there is a fairly clear division between these institutions and private museums, which focus much more on Chinese and Western contemporary art, and this state of affairs looks set to continue.
7 KEY DATES IN A MARKET 1978 - China opens out to the market economy 1991 - Opening of the Red Gate, the first private gallery 1993 - Art Bazaar in Guangzhou, the first fair in China; the first auction; creation of China Guardian 1997 - Hong Kong is incorporated into China 2001 - China joins the WTO 2007 - Opening of the UCCA, China's first private museum; creation of Art HK, which later becomes Art Basel Hong Kong 2016 - Taikang Life Insurance Company (China Guardian) becomes the biggest individual shareholder in Sotheby’s (13.5%)
by Pierre Naquin