Chinese art market soul-searches as prices plummet
By James Pomfret
HONG KONG (Reuters) - The fallow plots of farmland on the edge of the artists' village of Songzhuang are a symbol of Chinese contemporary art's recent boom and bust cycle.
When prices for Chinese art soared, there were grand plans to build more galleries and studios in this artists' hamlet near Beijing. Yet today, after art prices plunged by some 60 percent in the past year, the expansion plans have floundered.
After a white-hot stint, the financial crisis has battered China's art landscape, shrinking investment in grand schemes like Songzhuang, shuttering galleries in Beijing's pioneering 798 arts district and deflating bloated egos, valuations and excesses.
"The Chinese contemporary market was over-swollen before. I felt it wasn't very healthy," said Nan Xi, a former Chinese army officer turned artist whose works, huge pointillist ink-brush canvasses which he displays in his spacious Songzhuang villa, fetched around half a million yuan at the peak of the market.
In the good days, ferocious bidding in auction rooms at the market's peak in 2007 and 2008 caused prices to spiral skyward with buyers and speculators treating contemporary artwork almost like stocks or tradeable commodities.
What resulted was a glut of average art at inflated prices and a growing community of millionaire artists, some more drawn by the opportunities to make vast amounts of cash than any artistic vision.
"The financial crisis has been a good lesson for us; to better know what the market is, and art's relationship to it. Having too much money is not good for an artist's development," said Nan Xi.
REASONABLE PRICES Continued...