5. Youve drawn comparisons between the present market climate, and the lead up to the Japanese crash in 1990. What are your fears for the Chinese market? Is a crash imminent and what are the likely results? (And just because the media loves a bit of sensation) When do you see this happening?
The biggest problem with the Chinese art market is that there is very little evidence that the prices being paid for contemporary, modern and historical art are sustainable and justifiable. In order for prices to merely stagnate as opposed to crash when the wealth driving the Chinese art price bubble dries up (as it surely will), the current prices being paid for Chinese art, and for western art by Chinese buyers, would have to be justifiable in a post-boom climate. This would mean that the prices being paid at the moment would have to correlate with the perceived art historical importance, the level and nature of critical recognition, the aesthetic appeal , the rarity of the work of art in other words, all the factors and characteristics of the works of art that can be rated, graded, compared and contrasted.
There is no doubt that the market for Chinese art and the Chinese art market are in serious trouble. The rate at which the prices for Chinese are rising, and the rate of growth that the Chinese art market is experiencing, cannot continue for much longer. I do, however, think it would be foolish to underestimate the level of wealth coming out of China and the momentum of the Chinese economy. Whereas the Japanese were focussed very much on the work of Western master artists a market of limited supply the Chinese are showing much more interest in the work of their own contemporary artists of which there is a virtually unlimited supply. As long as the money continues to flow, there will continue to be emerging Chinese contemporary artists ready and waiting to take the place of those artists who perhaps lose their appeal. What this means is that the current Chinese art market boom theoretically has a longer shelf life than the Japanese boom. This also means that the most likely reason for a price contraction will be an economic event such as the bursting of the real estate bubble.
In my opinion the most damning evidence of a bleak future for the Chinese art market is the direction that Chinas property market is heading. What China is doing is boosting their economy by building massive cities in anticipation of the massive rise in the number of Chinese people who can afford to purchase their own home that the Chinese government thinks will take place. The problem is that many of these cities remain empty long after construction was completed and offer no signs of filling up with