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China: The Explosive Growth Continues

China’s art market continued its explosive growth last year, with auction sales hitting record levels and growing numbers of private collectors and corporations becoming active buyers. Increasing wealth and strong demand is behind a wave of cultural repatriation and philanthropy, experts say, with hundreds of new museums expected to open throughout the country in the

1,000 New Museums Predicted by 2015

BEIJING—China’s art market continued its explosive growth last year, with auction sales hitting record levels and growing numbers of private collectors and corporations becoming active buyers. Increasing wealth and strong demand is behind a wave of cultural repatriation and philanthropy, experts say, with hundreds of new museums expected to open throughout the country in the next decade. In 2002 there were roughly 2,000 museums in China. By 2015, the government predicts, there will be 1,000 more—most of them privately owned.

Since 1999, when the commercial branch of the People’s Liberation Army (PLA), known as the China Poly Group Corporation, opened one of the country’s first private museums, the number of nongovernmental institutions has mushroomed. Some are open to the public, while others are private and can be visited by invitation only.

In 2004 auction sales nearly doubled, to CNY8.5 billion ($1 billion) from CNY4.8 billion ($579.9 million) in 2003, according to the China Auction Association, which counts more than 1,200 art auction houses in China. The market last fall saw companies such as China Guardian pull in CNY697 million ($86.3 million) in four days—and it hailed the arrival of the new auction house Forever, which has partnered with Christie’s (see ANL, 10/25/05). To date, much of the buying activity has been heavily focused on Chinese art, though some buyers have broadened their collecting to include contemporary and other works by Western artists as well.

Cultural philanthropy is on the rise. The Poly Group, which has already invested CNY800 million (about $100 million) to buy back Chinese art from abroad, is leading the charge. The Poly Group is a state-owned enterprise that was cleaved from the military in 1999, when the Chinese government sought to separate the commercial operations of the military from its national duties.

The Poly Group has five main businesses: military trading, real estate development, import and export, property services and cultural operations, including theater distribution, museums and film production. It is run by Major General He Ping, the firm’s vice chairman.

The Poly Group is currently in the process of moving its collection of Northern Qi dynasty (550-577) stone carvings and Western Zhou dynasty (circa 1100-771 B.C.) bronzeware into a larger space in its new Poly Plaza building in the Dongcheng district of Beijing. It is also planning to open additional museums in cities where it owns movie theaters. The first satellite museum will be opened in Shenzhen next year.

Poly Group’s mission is “to rescue and protect Chinese cultural relics lost abroad,” curator Jiang Ying Chung told ARTnewsletter. Fresh from a buying mission in Taiwan, where the company purchased additional Western Zhou bronzes (large vessels commonly used for ritual purposes) to add to its collection, Jiang notes that the collecting activity is expanding to include other artifacts such as jade and ceramics.

When the Poly Group first started investing in art in 1998, it focused on stone and bronze since these items were “more expensive to collect, and only a group like the Poly Art Museum had the ability to take up this challenge,” says Jiang.

More Private Investors at the Ready

While Poly Group is certainly the most influential player in China, others are following in its wake. Two years ago, after the Cultural Relics law was amended to permit private ownership of antiquities, dealer and former book editor Ma Weidu opened the Guanfu Museum, specializing in ceramics and furniture, in Beijing’s trendy Chao Yang district. (In the late 1990s, prior to the amendment, Ma had opened a more modest museum in Beijing.)

For the latest project, Ma found ten silent investors who were willing to share his philanthropic vision and expand his venue. As the front man of this collective, Ma has become a fixture on the auction circuit.

“We are just at the very beginning” of this trend, he says. There are still no tax shelters to encourage museum donations, and the legal status of private museums remains gray, he adds. But it’s the future in China, he insists. “It’s not enough to rely on our state museums. I wanted to set a trend. . . to inspire. Now many more Chinese people want to do this.”

Growing numbers of corporations are building private institutions as part of larger real estate developments. For instance, three years ago the Antaeus Group, Beijing, a real estate company that has recently expanded to include cultural pursuits such as book publishing, theatrical distribution and art auctions, invested CNY50 million ($6.2 million) in the city’s Today Art Museum.

Company chairman Zhang Baoquan, who considers himself an artist, has a permanent contemporary art collection, valued at CNY30 million ($3.7 million), which includes works by artists from political Pop art painter Wang Guangyi to modern ink painters Liu Jin’an and Tian Liming and modernists such as Zhang Ding and Wang Yong.

Besides displaying works from Zhang’s personal collection, the museum, which has an annual CNY20 million ($2.5 million) budget, is curating other contemporary shows of both Western and Chinese art, says Zhang. Next year, he relates, he plans to expand the museum from two rooms to six.

In Shanghai, real estate company Shanghai Zendai Property Ltd. has tucked its Zendai Museum of Modern Art into an enormous residential and shopping complex on the Pudong side of the river. In June the museum opened with much fanfare, featuring multimedia works by renowned video artists Shoufay Derz and Keith Wong, among others.

Zendai chairman Dai Zhi Kang is amassing his own personal collection, including the famous sculpture Thumbs Up, by French artist César; and LOVE, by American Pop artist Robert Indiana. Although Dai says he plans to keep his personal collection separate from that of the museum, he is injecting roughly CNY6 million ($740,000) a year to curate six shows.

But for every new private museum open to the public, such as the Today Art Museum, there are dozens of individuals who make their collections available only by special request. It is difficult to estimate the number of such collections in existence, since many are not to be found in Beijing or Shanghai. Some of the biggest collectors are in regional metropolises—in cities with names that are unfamiliar to most Westerners.

Some Active Players

Xu Qiming, who runs one of China’s largest eel-processing factories in Ningbo, is an aggressive ceramic collector and a regular on the circuit. At an auction at Cheng Xuan recently, he paid CNY400,000 ($50,000) for two blue-and-white Ming dynasty (1368-1644) pieces. Xu shows his collection only to friends but says he is in talks with the Ningbo government with a view to building a museum.

Lu Hanzhen, head of a nylon-fabric manufacturing plant in nearby Cixi City, is also an active collector. An entire floor in his factory is devoted to his ceramics collection, which he makes available to clients and friends. He has even hired a full-time curator.

“It’s all about face,” or social status, says Ma, referring to the philanthropic impulse of these new buyers. However, he points out, the private institutions here will not reach the level of maturity in the West until China creates some tax shelters to make it more financially feasible for mainland tycoons to “give back” to the nation.

Despite the hurdles collectors still face on the mainland, their activities are reverberating elsewhere. In a sign of the times, two new Asian art fairs will launch in Hong Kong in May 2006.

Hong Kong furniture dealer Andy Hei, the organizer behind the International Asian Antique and Art Fair—set to run from May 27-31—is betting that the epicenter for Asian art will shift from New York and London to Hong Kong during the next decade: “Our target is to attract dealers from outside China and let them meet the biggest potential market in the future.”

But Hei has some tough competition from the Poly Group, which appears to be dipping its toes into the trading side of the business. It not only formed its own mainland auction house, Poly International Auction, in July to sell contemporary art, but is also collaborating with two state-run museums in China to organize a second Hong Kong trade fair—the Asia International Arts & Antiques Fair, scheduled to run from May 26-May 29.


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