News-Antique.com - Jun 03,2011 - An Art Market Bubble Chinese Style Pt. 3 artmarketblog.com
It seems that most people associate an art market boom with a sudden and rapid increase in the prices being paid for works of art combined with an increase in the number of works of art being sold on either a market-wide scale or within a particular sector of the art market. Applying this definition to the current progression of the Chinese art market leaves no doubt that we are in the midst of a Chinese art market boom. This is all well and good, but what happens when the boom ends?
Only four years ago in 2007 the art market experienced a period of Chinese domination, similar to that which we are experiencing now, that ended abruptly at the beginning of 2009 thanks to the global financial crisis. As a result of the bust a number of Chinese galleries were forced to close and a large number of contemporary Chinese artists were dropped by galleries then were left to fade into obscurity. Because galleries and dealers failed to properly nurture and cultivate the careers of the young Chinese contemporary artists who were swept up in the boom, these artists did not have the experience or level of career development that they would have needed to survive the bust.
After the demise of the Chinese art market boom in 2009, galleries and dealers admitted that they had made mistakes and said that they would act more cautiously in the future and properly nurture artists careers. The question is, has this occurred? As far as I am concerned there is more than enough evidence to suggest that the same problems are recurring this time around. Ill prepared young contemporary artists are still being flung into the limelight in a market that has an underdeveloped gallery and dealer network which cannot support the long term careers of all the artists involved in this boom.
An art market boom is almost always treated as a positive event regardless of whether or not the boom will end positively for the market and for the artists involved. As an art market analyst my primary concern is what the outcome of the boom will be because all booms have to end at some stage. There are generally two ways that a boom can end. The first is what we know as a bust or in other words a sudden and rapid decrease in the prices being paid for works of art and the number of works being sold. The second option is the most favourable and involves a stagnation of prices and the number of works being sold as opposed to a massive drop in prices and the number of works being sold.
In order for prices to merely stagnate at the end of art market boom there would have to be significant evidence that the prices being paid during the boom were in some way justifiable. This is not such a problem for