Modern Chinese art is raking in record prices, both abroad and in China, where both the number of galleries and collectors is growing rapidly. But some experts think the red-hot art market is a bubble waiting to burst.
When Australian Brian Wallace opened his Red Gate Gallery in a Ming dynasty watchtower in Beijing 15 years ago, he had little competition. Then, contemporary Chinese art was mainly sold through galleries in Hong Kong. Demand was moderate and mainly driven by Westerners living in China or other Asian countries.
This has considerably changed. In Beijing and Shanghai, trendy galleries and art centers have sprung up like mushrooms over the past few years. The market for modern Chinese art is hot, both abroad and in China. Gallery owners such as Wallace now achieve prices they could only dream of a few years ago.
"In our 15th anniversary show we had works from a couple of thousand dollars up to the top end which is about $150,000 for some large sculptural pieces," he explained. "But if you had asked me that question four, five years ago, I would have said most of our work is about a few hundred dollars to less than $10,000, thinking that was quite a high range."
Sales of modern Chinese art by the auction houses Sotheby's and Christie's in New York and Hong Kong have raised record sums in the past two years. At this year's spring auction in Hong Kong, Sotheby's sold a contemporary Chinese painting for $3.6 million - the highest amount ever paid for a Chinese oil painting.
Most of the buyers still are foreign art lovers. But increasingly, Chinese collectors and investors are putting serious money into modern art.
Wallace says that today, up to a third of his customers are newly wealthy Chinese.
"The group that is actually the buyers is an older generation, late thirties, forties, entrepreneurs who have done really well," says Wallace. "The one child they have is already in high school or on the way to university overseas so they have a lot more time on their hands. Their businesses are running well and generating money, it allows them to do many other things."
Johnson Chang, the director of Hong Kong's Hanart gallery, says while some Chinese buyers view art mainly as an investment or a status symbol, some buy for emotional reasons.
"They are people who want to buy back their own history, especially art from the last 20 years that has slipped out of China because people did not consider them important at the time or simply could not afford it at the time," says Chang.
There are few places in China where the art boom can be felt as strongly as in the trendy Seven-Nine-Eight art complex in Beijing. The former ammunition factory is home to dozens of avant-garde galleries and art studios, all established in the past two years. New ones are opening up all the time.
Tian Yuan, the manager of the White Space Gallery in the district, says the artists her gallery represents constantly ask for higher prices.
She says they think that everyone now can sell for a high price and that their work is not worse than that of others. She says the price of a work of art can double in just a month - something she calls a typical Chinese situation not seen in other countries.
Tian says that often, Chinese investors demand the works of well-known artists without even asking for the price. Business is good, but Tian is cautious. Like other gallery managers, she thinks the rapid price expansion is a bubble waiting to burst.
Tian thinks the development may go on for two, maybe three, more years. After that, she says, good works of top artists might maintain their prices or even rise in value. But others will be out of the game. She says it is impossible for the current situation to continue.
One of the benefits of the current boom is that many Chinese have become more appreciative of modern art. Browsing through art galleries has become a popular pastime, especially for young people.
In the past, the communist government strictly controlled the arts in China. The party leadership wanted art to praise the communist revolution or nationalistic ideals. Even a few years ago, government officials frequently shut down exhibits of works they considered critical of the government or immoral.
Now, that censorship has relaxed. Tian says the Chinese government is proud of the country's thriving modern art scene and feels honored by the artists' success.
