China ranks 1st in global art market in 2011
Last Updated:2012-07-10 16:38 |
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By Zhuang Guangping

In 2011, total transaction volume of China's art market reached RMB 195.9 billion Yuan, ranking 1st in the world. Despite its large volume, China's art market is not very mature yet, the foundation for its development is not solid, and supervision policy and regulations are rather incomplete. So, although China's art market is huge and developing at a rapid pace, there exist numerous problems.


Major problems include: first, the structure of the trading body of the market is irrational, with extremely prosperous auction market but comparatively inactive galleries and other primary markets, which is completely opposite to mature art markets in foreign countries. Second, although there are tens of millions of consumers and investors in the art market, not many of them understand the market itself and possess sufficient artistic attainment. Third, the transaction system of the art market is extremely incomplete and transaction rules are missing.

With regard to regulating the administration of the art market, Tuo Zuhai, deputy director of the Cultural Market Department of the Ministry of Culture, suggests that supervision over the art market is a weak link in the supervision of the art market. Efforts in this aspect have been made long ago, but no substantial progress has been achieved. One of the reasons is that the development level and the regulation level of the market are still very low. Although market problems have been exposed, ideas and measures to solve these problems are inadequate, and this makes it difficult for legislative and administration departments to take legal measures. From the supervision perspective, it remains controversial whether some of the problems should be regulated or not. If agreement can't be achieved on such essential issues, legal construction will face significant difficulties.

Currently, the Ministry of Culture is regulating the art market mainly in two aspects. The first is enhancing market cultivation and construction. The art market itself is not mature enough, its body structure is irrational, and the operation management mechanism is incomplete. Therefore, it's necessary to cultivate and construct, solving regulations problem during the development. The development of the art market has its own rules. With income level improving in the future, society's passion for art will continue to grow. In spite of the scale we already have now, the room for development in the future is still vast. We should expand the market with care.

The second aspect is enhancing supervision and completing laws and regulations. The most important task of the Ministry of Culture is to promulgate regulations. It is a long-term goal. The Ministry of Culture is currently commissioning legal professionals and art management professionals to carry out special studies to provide support and service to the making of laws and regulations. Besides, the Ministry of Culture will also formulate department rules and promulgate special regulative documents. After operation for some time in this way, practical experience can be accumulated for the official implementation of regulations.

In this year's spring auction market, several works of arts were auctioned at as high as more than RMB 100 million Yuan. With regard to the price in the auction market that seems to have no limit, Tuo Zuhai suggests that the overall trend of the price of art has been going upwards, which is different from other commodity markets. Generally speaking, the price of art is emblematic of people's recognition of the art itself. As cultural products, the core value of art lies in the cultural content, including artistic appreciation, historic research, or even scientific research. But the deciding factor of whether the price can be recognized and accepted by the market is all about the judgment of the buyers and the appreciators.

To regulate the art market, the Ministry of Culture proposes three standards: the core value of art should be culture, the rule of the operation of the art market is honesty, and art collector's behavior should be rational.

Investors should have a rational attitude. Individual investors who enter the market with mentality of speculation but without professional knowledge and insight are liable to risks. The reason why the core value of art should be culture is stressed is to rectify investors' intentions in going into this market. The expansion of the art market requires investment, but such investment should be based on understanding of the development of the art market. Investors should be rational in their attitude.

In the past, art collection was a privilege of the dignitary, a noble hobby of the minority. But it is no longer the case. Many ordinary people take part in it now. Investors need to improve their appreciation ability, or entrust it to professionals. Currently, a group of art investment management companies and art agents are growing up in the market. As professionals, they provide professional service and earn their commission, increasing the reliability of the investment.

As for investment direction for ordinary consumers, Tuo Zuhai suggests "two priorities". The first priority is contemporary art, including modern calligraphy and paintings, and classical ancient pottery. Investors can buy them in a gallery and some other institutions. The second priority is the works of artists who are not famous yet but have the potentials to be. You need to have the vision to spot artists you like and see the value in their works. Their works are undervalued now and have much room for appreciation.

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