Few stock options have risen twenty fold in value in three years—but the oil paintings of Zhang Xiaogang have. Zhang, aged 48, the leading artist of south China, paints large luminous portraits based on family photographs from the cultural revolution. The glazed look and big pupils of his subjects make them seem ambiguously vulnerable—childish, alienated, zombie-like. The artist says these are images of the dissolution of the individual within the collectives of the traditional Chinese family and communist society. It's a message that few would miss. In 2003, one of Zhang's portraits sold for $75,000 at auction. In 2006 it was re-auctioned for $1.5m. It will probably be exhibited in London next summer when Charles Saatchi opens his Chelsea gallery with a large exhibition of contemporary art. Saatchi is the latest in a line of big-spending collectors to be buying Chinese. The Serpentine recently filled Battersea power station with contemporary Chinese art.
China is the latest chapter in the contemporary art boom. In 2005 the volume of trading at the major art auction house in Beijing increased two and a half times to $145m. Total turnover for the whole art auction market in China is now 21 times higher than in 2001—around 13.5bn yuan ($1.7bn) in 2005. At least 50 art auction houses have opened in Beijing in recent years. Young artists aren't the only ones benefiting—Ming vases have also been doing well.
The causes of the boom are easily discernable. First there's the insatiable demand of the new globalised economy. Most collectors of contemporary Chinese art are westerners, but some are the new Chinese rich. They are purchasing art from a rapidly developing part of the world, and in this sense are buying something that has, until recently, clearly been undervalued. The question is: by how much?
You could argue that buying Chinese art is no different from buying property in eastern Europe in the 1990s. You were, and usually still are, almost bound to make money investing in an emerging capitalist economy. But Chinese property prices are rising relatively modestly—somewhere between 5 and 15 per cent a year. The value of art works has been doubling annually.
The other key element here is speculation. Galleries are said to be placing works of art directly into auction, which is virtually unheard of in Europe. Works of art made in 2006 are already on the block—such as Zeng Chuanxing's Paper Bride, the cover lot in Christie's October sale at the close of the Frieze art fair. Usually, works of art are initially sold in the primary market—galleries—where the artist's early career can be managed and his value established through exhibitions. In the art world it is considered sacrilege to "flip" a work—buy it and then immediately put it up for auction—yet this, according to Cristina Ruiz, editor of the Art Newspaper, is a widespread practice with Chinese art. Julia Colman has been running Chinese Contemporary, a specialist London gallery, since 1996. "Not all the art is overvalued," she told me. "Some of the artists are in museum collections and have had years of recognition. But you have to look out for—I'm not going to give you names —young artists with no CV, whose starting price at auction is $20,000 and they are being bid up to $100,000. There are a number of tricks that go on in the auction rooms. People get their friends to bid up the work. I've seen the wife of one artist bid up her husband's work." Ominously, the Chinese art critic Fang Zhenning reports that speculative money is flowing into the art market from the property market as the Chinese government has restrained rises in real estate prices in recent years. It was constraints on property prices in Japan that fuelled the last global art boom of the 1980s. Japanese property developers bundled up works of art with the purchase of property to increase the price. When property crashed, so did the art market.
Collectors and gallerists enthuse that the young Chinese contemporary artists are part of a fascinating new politicised art movement that has emerged in China since 1989. These are artists, they say, who have rather more interesting life experiences than the beer-swilling inhabitants of east London or New York sophisticates. That's true in theory, but in practice much of the art is rubbish—its stuffed animals and consumerist kitsch are painfully derivative of western contemporary art, and it is full of irritatingly obvious references to social realism. Perfect for dim-witted collectors and fashion-hungry curators, but not destined for the history books.
Even so, the boom doesn't look set to end any time soon. A new contemporary art fair is being opened in Shanghai next year, and so is a new branch of the Pompidou Centre. Meanwhile, some of China's biggest companies are doubling their profits annually (the mainland's biggest property developer, China Vanke, reported that first-half profits this year rose 59 per cent, to $159m). The Chinese government also appears to be playing its own minor part—it recently permitted the exhibition of a photograph in which a man extends his tongue to lick a portrait of Mao.
