China slows, but remains potent

The contraction of the Chinese Contemporary art market¹ (-36.9%), with turnover of $542 million versus $860 million the previous year, is indeed substantial. However the slowdown seems to have been largely triggered by a combination of exogenous factors, first among which is undoubtedly the drastic anti-corruption drive initiated by President Xi Jinping which temporarily paralysed the country’s luxury goods sectors and its art market. In the absence of clear legal definitions, a large section of the PRC’s wealthy population has temporarily refrained from making “extravagant” acquisitions. At the same time, the contraction of the Chinese art market has a number of similarities with the recent evolution of Chinese stock markets and it has mirrored a sharp slowdown in China’s economic growth that reached its lowest level in 25 years at end-2014. In short, economic reality has inevitably had an impact on the country’s art market. However, it is also valid to consider the slowdown as a natural adjustment to the phenomenal growth by the Chinese art market in recent years.

Demand has substantially contracted leading to a sharp rise in auction unsold rates in the Contemporary art segment: the overall rate has risen from 24% to 31%² in one year. However, in historical terms this is by no means an alarming rate. By comparison the unsold rate is 28% in the USA, 38% in the UK and 56% in France.

At the same time, Chinese artists are still very present in the global rankings: 17 in the Top 50 (ranked by turnover) and nine of these posted new auction records.

Among these new records, those set for painters like Fang Lijun (founder of Cynical Realism), Liu Wei, Liu Xiaodong and Jia Aili suggest that painting still has a certain dominance over traditional Chinese drawing techniques.

In fact Chinese painting is currently enjoying a creative renaissance. The recent auction successes of Jia Aili perfectly illustrate this pictorial revival. Jia Aili represents a new generation of Chinese artists preoccupied with environmental issues, the march of progress and themes such as isolation in contemporary society. Jia Aili, who currently lives in Beijing, irrupted onto the international scene in an exhibition of the Simon Franks and Rob Suss Collection at the London Saatchi Gallery in 2009. A few months later, he enjoyed a strong (and noticed) auction debut in Hong Kong with a work titledOn the Field of Hopes that fetched $250,000³, four times its high estimate. This year the young prodigy appeared on the front cover of the catalogue for Christie’s Contemporary Art Sale in Shanghai which estimated the work in question at between $1 million and $1.5 million, a range that clearly illustrated the auction house’s confidence. And Christie’s were not wrong: the work fetched its high estimate. Since then, Jia Aili has crossed the million-dollar threshold three times. His auction record stands at the equivalent of $1.7 million for Good Morning, World, a tryptich measuring over 10 metres that sold last April at Sotheby’s in Hong Kong.

Christie’s and Sotheby’s are clearly poised to make the most of this new star signature in London where he is beginning to sell since June 2014. Ranked 38th in the global ranking of Contemporary artists by auction turnover, Jia Aili did better in 2014/2015 than both Antony Gormley and Takashi Murakami.

Despite its slowdown, the Chinese market remains buoyant: its artists represent the second best performing national grouping in the global ranking after the Americans, accounting for 21% of total global turnover from Contemporary art – versus 39% for the American artists, who largely dominate the global Contemporary art market.