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This piece was written for the Art Newspaper.

As the financial crisis hits home in China people on the street have a pragmatic attitude towards the situation, 2008 was the year of the Rat, and a particularly inauspicious one because it fell on a leap year, and there was no full moon during the Spring festival, all spelling a bad year. But next year is the year of the bull, and according to traditional Chinese wisdom, this is usually a good year. Chinese New Year is similar to Christmas in the Christian calendar, and it is likely a lot of fireworks will be lit in the hope of enticing the Gods to look favourably on China’s art industries.
Currently Chinese newspapers almost daily are carrying stories of factory closures, with workers abandoned by factory owners, and having to go home to the countryside on foot, wages unpaid. Similarly artists are packing up their studios in overpriced venues such as Beijing’s 798 art district and Shanghai’s M50.
Gallerist Michale Schultz said: “I think that certain artists whose prices have been unhealthily pushed in the last years, will vanish from the market. As happened to the ‘young and wild’ artists in Germany in the 90’s, where a whole generation around the artists Fetting, Salome and Zimmer disappeared. There will be a good chance for young artists, which will also be used by collectors. The collectors will also change, some of the wildcatters will disappear and others, new reliable collectors, will take part in the art market.
The Asian artists do not suffer from being a niche art, but suffer due to the circumstances that the market is not as developed as in Europe. However the future belongs to them.”
For the Chinese art world 2008 has been a mixed bag, the Beijing Olympics did bring an influx of visitors, but the government’s heavy handed dealing with visas and security meant a lot of visitors never came, and some resident foreigners were chased out. So the large investments made in Beijing did not really bear much fruit. Foreign buyers are still the mainstay of the Chinese art scene, as Beijing based curator Karen Smith told the Art Newspaper:
“There has been a lot of money flowing around in the Chinese art scene over the last few years which has had a dramatic effect upon the art scene and the nature of the art being produced. That volume of funds is going to fluctuate somewhat in the coming year or so, which is not a bad thing. It might make artists reflect upon the quality of the work they are producing, and encourage some of the new galleries to formulate more productive strategies to deal with a slackening off in the market. So, hopefully these recent events will have a positive impact. After all, the best of Chinese avant-garde art was produced in the early years (late 1980s through the 1990s) in the complete absence of an art market.”
Some galleries and dealers are still exuberant, but many are beginning to become pessimistic. An Italian dealer in Chinese art works and owner of Shangheye Gallery said: “this year has been good, I did Euro 800,000 of business this year, only in October we had absolutely no business at all.”
China’s art scene is heavily laced with gossip, exacerbated by art chat websites such as artbaba and heyshihui which spread rumours and facts intermittently. Some big name galleries in Beijing and Shanghai are allegedly closing, or their staff are looking for work elsewhere. Foreign buyers aren’t buying, or even worse, have bought paintings and aren’t paying their bills, partly due to the collapse of the Euro against China’s currency the RMB, one gallerist from a major gallery said on condition of anonymity.
In the land of hard facts Gallerie Michael Schultz has closed its Beijing location, planning to open a new space in Beijing’s Caochangdi district next year. Schlutz has ended his plan to open a gallery in New York. “Of course the situation on the art market has become worse, especially in Asia. But we are optimistic and keep in contact with collectors and museums ….I think that after a short period of mediation it will go on better again. Amazingly our business in Europe is going on quite well,” Schultz said. He plans a major show of Beuys works in Beijing in 2009.
Gallery Urs Meile, one of Beijing’s major galleries, shrugged off worries about sales. According to the gallery’s Nataline Colonnello recent works in the show by Wang Xingwei have been booked, or are not for sale. Early next year the gallery plans a shock art performance by the artist He Yunchang, already blinded by an earlier performance. He plans to “remove an important part of his body, and create an object. It might eventually kill him,” Colonnello said.
According to Fu Min, manager of the Korean owned Artside Gallery in Beijing, recent sales “are not as good as before.” But despite the downturn the gallery still sold several pieces in the USD 60,000 range from their recent show of the artist Oh Soufan. Pace Beijing has closed for redecoration.
The Ullens Center in Beijing has turned more to commercial sponsorship, with a large scale show sponsored and in collaboration with Dior. The artists, many of them China’s well known names, had their work intermingled with Dior’s collections. Some artists, such as Zhang Huan, created homage works to Dior, such as Zhang’s ash painting of the designer.
The mainstay of Shanghai’s art scene over the next two years will be the upcoming World Expo in 2010. Large government funds of more than $2 billion will be spent on “thousands of events,” according to the organizers. The recent huge scale Shanghai E Arts festival was seen as a precursor for this event, with large numbers of foreign artists being flown in and provided free accommodation in government dormitories, with even their own (free) beer hall being provided by the Chinese authorities. Artists are pitching projects, and some have already received commissions, such as Chinese artist Wang Xiaohui, who told the Art Newspaper she has secured the Shanghai Pavilion commission.