Zhang Daqian and Qi Baishi top earners in global auction sales.

Of course, right after I submit my article on the Chinese art market to the Journal of Appraisal Studies, Artprice.com comes out with the latest stats. on China's place in the global art market. In my article I quoted Thierry Ehrman, the founder of Artprice.com, as saying that in 2010 China accounted for 33% of global fine art sales displacing the U.S. and U.K. and France for the first time since sales had been recorded. I also cited Artprice's 2010 Top-10 list of artists by auction revenue which included Qi Baishi and Zhang Daqian. At the time Pablo Picasso stood at number 1 and Qi Baishi was number 2. Well, it's 2012 and Artprice has come out with new stats for 2011. Time to revise again. China is still number 1 in total revenue for fine art but its market share has increased to 39% (from 33% in 2010). The US is number 2 with 25% of the market (down from 30% in 2010). Pablo Picasso has been displaced by Zhang Daqian as the top auction earner ($507 million) followed by Qi Baishi ($445 million). Picasso is now ranked fourth (311.6 million). Bloomberg News quotes Larry Warsh, a NY based collector, as saying it's not a big surprise, given China's abundance of cash and rich history of collecting. Also cited as underlying its rapid ascent in the global art marketplace is the nationalist sentiments of Chinese collectors who have their own artist heroes. Well, yeah, but there is more to these sky-high prices than conspicuous consumption and nationalistic fervor...There is market speculation by art investment funds, property flipping, rampant non-payment by Chinese buyers of some of the highest-priced properties, price-ramping and the false attribution of art by Chinese auction houses. The question remains: The Chinese Art Market: Sustainable Growth or Bust??

What's My Art Worth, Part 2 - Auction House Estimates

In a follow-up to the recent post, ``What's My Art Worth'' I think it would be helpful to explain the difference between estimates provided by auction houses and those provided by independent, professional appraisers.

Let's say you have a landscape painting by a California painter from the 1930s and you want to know what it might bring at auction. You do a little research online and discover that Bonhams & Butterfields has annual auctions in San Francisco for California painting. You go to their website and submit a digital photograph of your painting, its dimensions, where you acquired the piece etc... After a couple of weeks you hear back from them and they are interested in handling the painting in an upcoming auction. They provide an estimate of $3,000-$5,000. It's important to understand that these estimates are not simply a range of what like paintings have sold for at auction in recent years. Rather these estimates also take into account prospective buyers and what will draw them into bidding on the property. So typically, the estimate will be set low in the hopes that it will attract bidders looking for a bargain. The hoped for scenario is that this will encourage competitive bidding, driving up the price beyond the high end of the estimate.

An independent appraiser compliant with the ethics and standards of USPAP (Uniform Standards of Professional Appraisal Practice) approaches the project from a more objective standpoint. Marketing considerations have no bearing on our analysis. Moreover our fee is set at an hourly or per project rate rather than to the percentage of the appraised value which would obviously lead to inflated valuations. Rather the value conclusion of the painting is derived from an analysis of realized sales of similar properties at a variety of auction houses. Moreover, the appraiser interprets the nuances of the sale to determine why one painting may have sold for significantly more than another similar painting, or why it sold for twice times the estimate, who the bidders were, the history of ownership of the painting etc... The appraiser can also advise you on which auction house would be the best venue for selling your work by evaluating how often artworks by the artist are sold through their showrooms, how successful they have been in realizing realizing high prices relative to other auction houses etc..

For more on professional appraisal practice see the "Art of the Appraisal" in a recent NYTimes article.

http://www.nytimes.com/2011/10/19/business/choosing-experts-to-appraise-collectibles-and-valuables.html

What's My Art Worth?

In a sign of the times, one of the most frequent queries that we get these days goes something like this: ``I was given (inherited, won) a print or painting, sculpture by ``John Smith'' (or, I don't know who the artist is but it looks really old) and am curious about what it is worth because I'd like to sell it. Can you help me?''

Before we can answer that question, there is some key information that we need in order to determine if we can help you or, if you have something that is worth an appraiser's standard fee of upwards of $150 an hour.

Is it original?
By original we mean, is it a unique oil/acrylic/watercolor/drawing or sculpture that is signed by an artist? If you are not sure and if it is in a frame, examine it out of the frame.

Who is the artist?


Look for a signature on the front or the back of the painting, or, if it is a sculpture, on the base. Another reason to take a print or painting out of the frame is that there may be a gallery label on the back identifying the artist, title, date and even price.

What are the dimensions?
Height and width of a two-dimensional work, height, width and depth if a three-dimensional work.

What is the history of ownership?
Where did you or the person from whom you received the artwork acquire the piece? If you don't know, look for any old appraisals, invoices or certificates.

What is the condition?
The condition of the artwork usually has a significant impact on value. Look for rips, holes, insect infestation, fading, toning, water damage etc... Again, this is another reason to remove an artwork from the frame. Oftentimes artwork that has been in the family for decades has never been reframed, consequently the piece has become degraded due to over-exposure to light, or from non-archival acidic backings.

Do a quick google search with the artist's name to see if he or she pops up. Or go to one of the fine art databases to see if your artist has enough of a market to be included.

Finally, it is important to understand that the value of an artwork varies according to the purpose of the appraisal. The value assigned to a work for insurance purposes is Replacement Value, typically what you would pay at a gallery. The value assigned to an artwork for donation, estate tax or sales purposes, is known as Fair Market Value, defined by professional appraisal organizations as what a willing buyer and a willing seller would agree is a reasonable price in the open marketplace, usually the auction market.

Skate's Market Notes on Poly International Auction. Plus, a Ming Dynasty horse at Duke's in Dorset. - artnet Magazine

Some interesting background on China's auction powerhouse, Beijing Poly International.

Skate's Market Notes on Poly International Auction. Plus, a Ming Dynasty horse at Duke's in Dorset. - artnet Magazine

About that $65 million dollar painting....

As I mentioned in a blog post back in June, one of the big stories of the Spring Auctions held in Beijing and Hong Kong was the $65,399,350 paid for a painting by Qi Baishi, ``Eagle Standing on a Pine Tree with Four-character couplet in Seal Script'' at China Guardian Auctions on May 22nd. A truly astounding price and frankly, hard to understand. True, its provenance was impressive. Qi Baishi intended it as a gift for Chiang Kai-shek's 60th birthday, and the seller was well-known Shanghai billionaire collector Liu Yiqian. But who was the buyer?? Much has been made of the China's booming economy and rapidly expanding class of millionaires and billionaires. However, there is another explanation that has less to do with passion for art or even conspicuous consumption. As it turns out the buyer was a corporation, not an individual collector. Artron.net has reported that the Hunan TV & Broadcast Intermediary Co. Ltd. purchased the painting, adding it to a collection of hundreds of ink and oil paintings by modern masters. That the buyer is a corporation lends support to the idea that the current Chinese art market is speculative, and that it is investment groups and corporations that are driving the Chinese art market into the stratosphere. According to a recent article ``investing'' cash in the Chinese art market is looking even more attractive to Chinese tycoons and corporations due to an overheated real estate market. This along with growing inflation and low interest rates leaves few investment options in China.

Song Zhuang Art District, Beijing

One of the most interesting places I visited on my trip to China in early June was the Song Zhuang Art District on the outskirts of Beijing. We were taken by our friend Liu Yan who kindly arranged for us to meet with Shao Qi, an art gallery director, and to visit the studios of artists, Liu Liguo and Chen Qing Qing. The first artists moved to Song Zhuang in the mid-1990s after the government pushed them from their neighborhoods in Beijing to make room for new development projects. Looking for a new place to work, the artists moved to a rural village that would be somewhat removed from the purview of the state. Since then the artists have turned Song Zhuang from a backwater to a thriving artist colony which now numbers around 4000, including international art stars like Fang Lijun and Yue Minjun as well as thousands of struggling and foreign artists.


After driving for about 45 minutes away from the center of Beijing we arrived at what first appears to be a rather non-descript suburb with roads lined with small stores selling paint, pipes and vegetables. However, as our driving tour continued we were astounded to see a series of imposing, architecturally striking museums and galleries under construction. Those that were completed were mostly empty or closed.


Equally anomalous was a massive sculpture created by Fang Lijun set in the middle of a round-about. At first it struck me as looking like an over-sized Hersey's Kiss. But, as Shao Qi explained, the different colored and textured layers represent the hierarchy of Chinese society with the wide thick base made of earth identified with the peasant class supporting six more ever-diminishing layers up to the golden pinnacle representing China's political and business elite - a wry commentary on the disparity of wealth and power in China today.


Besides visiting the comfortable and well-appointed studios of Liu Liguo and Chen Qing Qing, we also stopped in to visit the condo of a middle-aged, amateur painter, and the wife of a wealthy businessman. Her current digs were modern and pleasant but temporary, and she was in the throes of designing and beginning construction on a brand-new, permanent home to be built on land leased from the local government. With China's newly affluent class taking up residence, the life-style of the majority of artists living and working in Song Zhuang is threatened by rising rents and plans by the government to develop Tongzhou, the district where Song Zhuang is located, into a commercial center by 2015.

Records set at Beijing Poly

Much as I would have liked to post more during my stay in Beijing and Shanghai, the Great Firewall of China prevented me from doing so (except when I was staying at my friend's place in Beijing which has VPN). Not only does the Great Firewall reject logging in to Facebook and Twitter but it also prevented me from accessing my own blog. I guess ``blog'' is a dirty word in China.

Not surprisingly, the auctions at Beijing Poly International went off great with many records set in various categories including traditional and contemporary Chinese painting. Setting the record for the most ever paid for a painting by a contemporary artist, a large horizontal abstract painting ``Lion Woods'' by master ink painter Wu Guanzhong who died a year ago (1919-2010) sold for 115 million RMB or more than US$17 million. Altogether twenty-five works by the artist were sold at Poly for over 500 million RMB or more that US$77 million.

Even more eye-popping was a landscape painting by the iconic 14th century master Wang Meng which sold for 402.5 million RMB or around US$62 million, the third highest price ever paid for a Chinese work at auction. This came on the heels of the China Guardian sale of a hanging scroll awkwardly entitled ``Eagle Standing on a Pine Tree with Couplet'' by the great ink painter Qi Baishi which sold for more than US$65 million. Born in 1864 in central China's Hunan Province, Qi Baishi is especially revered for his depiction of small things, such as birds, fish, fruit and vegetables. He was also known as an outstanding calligrapher. Figures from the art market data organization Art Price show that Qi's works raked in more than 70 million U.S. dollars in sales worldwide in 2009, only behind the works of Pablo Picasso and Andy Warhol.