Another piece written for the Art Newspaper
Shanghai opens USD $100 million tax free art trade center, plans to become “Panama of cultural trade”
A Shanghai government backed company has established a special center for tax free trade in artworks in the Waigaoqiao special trade zone. Waigaoqiao is a large bonded area, home to more than 150 large corporations, who use the area to manufacture industrial products, predominantly for export. Ren Yibiao, Chairman of OICT, the company in charge of the new center, and also CFO and vice President of Jinwin Investment, a large Shanghai government backed investment group, in an exclusive interview with Art Newspaper explained that the Shanghai government has created a series of new regulations relating to tax refunds and tax free incentives especially for the new art trade center. Its formal English language name is the “Shanghai Oriental International Cultural Service and Trade Platform” (OICT).
Based in a brand new 34 floor building that cost almost USD$ 100 million to construct, completed in September, (the entire building is dedicated to OICT) Ren said: “this is to be a platform for cultural trade, I want this to be the Panama of cultural and copyright trade in China. My goal is that this will be a center where all cultural companies will register here.” The new regulations that have been created for OICT allow firms registered with his company to two years tax free sales of artworks and related cultural products into China, and 50% reduction thereafter, with numerous additional tax benefits, including a 100% refund of personal tax for managers for three years, and a 50% reduction thereafter.
OICT also offers subsidized rents for tenants conducting cultural trade related business in the purpose built building, of RMB 1.8 (USD$ 0.26) per meter per day. Ren also pointed out he has also fitted out a 3000m2 space, to European standards, for auction houses and galleries that want to showcase their work to Chinese collectors in the bonded area. “We are within the bonded area of Waigaoqiao, that means within this area, you are in the border of China yet outside the jurisdiction of China customs” Ren said. Another two floors are dedicated to common use show rooms, meeting rooms and conference facilities. “Altogether about 10,000 m2,” Ren said.
Asked whether this is a direct challenge to the tax free status of Hong Kong, or Singapore Freeport, Ren said:” This is a very sensitive question. Hong Kong has a long history in this field, we cannot compete with them, we have just started. We want to develop a Chinese cultural zone, this includes Taiwan, Hong Kong, even Singapore, to work together to create, to develop a market, it will work if we join together. We visited Hong Kong and Macau, and plan visits to Taiwan and Singapore to discuss this. Shanghai is a big port, and before the revolution it was also a cultural port, you needed to be successful in Shanghai before you were successful in China. There are numerous opportunities in the cultural trade in Shanghai, we wish to develop the business of big, well known names of the culture business, here.”
Ren explained that to date the OICT center has secured RMB 700 million (USD$ 102 million) investment, RMB 200 million (USD$ 29 million) in bank loans, the remainder 80% from Jinwin Group and 20% from Waigaoqiao Group. “I hope that we should become profitable in three to five years,” Ren said.
Jinwin Group has diverse interests in Shanghai, and has control of numerous business’ – such as Shanghai’s exclusive State Council approved license for importing of foreign publications, and a controlling share in the listed Shanghai Oriental Pearl Tower, the city’s iconic landmark. “Jinwin has capital of RMB several billion (several hundred million US dollars) to promote cultural trade,” Ren said.
Commenting on the current economic crisis Ren, who has a long background in China’s film industry, said: “Well, for the culture industry, there are still many opportunities in Shanghai. For instance Hollywood grew up during the economic crisis of the 1930s, the cartoon industries of Korea and Japan during the 1970s crisis. Currently, all Chinese industry is affected, and we are paying attention to this, I feel in China we haven’t reached the bottom point yet, but the affect will not be as strong as in the US, and within a year the situation will be improved, to say just right, for us.”
Ren is also looking for partners for forums and discussions for artists and business people on topics such as meeting the requirements of collectors, and combining experiences and views on collectors from various points of the globe, such as China and Europe. “To meet the traditional habits and spending habits of Chinese collectors, we first need to define, say, European collectors. How to meet the Chinese cultural collectors, to understand this mentality, we will need some discussion to meet these issues.”
Ren also will provide long term storage facilities, and has generous attitude to exhibitors, such as art fairs and auction houses who wish to use his company’s facilities. “There are not many people doing this trade, this side of the art business, if someone wants to put their works here for an exhibition I can provide some finances,” Ren said.
According to Ren about thirty tenants have booked to move in after Chinese New Year, and they are in talks for cooperation with galleries such as Shanghart, and others.
More art market woes, another piece for the Art Newspaper
“Financial Tsunami” causes woes for China’s art market, Beijing creates art fund to support galleries
The economic difficulties being widely referred to as the “financial tsunami” in the Chinese press have led to numerous gallery closures in Beijing and Shanghai. According to Lynn Zhang, publisher of an art gallery guide and the quarterly ArtzineChina, 36 galleries have closed in Beijing recently.
“Some galleries are closing outright, or two to three or even four galleries are combining to make one new gallery. Many large galleries will not admit to problems, but if you visit these areas such as Beijing 798 or Shanghai Sculpture Space you see the big galleries have no operations. Some are considering cutting back the number of shows per year, maybe from 6 to 3 shows a year, or first seeing if the collectors will buy the work before holding a show. ” Zhang said.
The management office of Beijing’s 798 do not answer the phone.
In Beijing Red Gate gallery has closed its off shoot gallery in the 798 art district.
“We are looking positively at what is happening though we will cut our exhibition program down during the year,” gallery owner Brian Wallace said. Also Studio Rouge closed their location on the Bund, blaming partly the massive construction work there in preparation for the Shanghai World Expo, which will pedestrianize Shanghai’s waterfront.
Widely rumoured to be closing is the high profile Shanghai Gallery of Art, located in the prestigious 3 on the Bund development. A spokesperson who declined to be named at 3 on the Bund said “There are no current plans to close the gallery that we are aware of.” Another staff member indicated there will be a management meeting to “clarify matters” in the near future.
China Economic News reported that the auction houses Beijing Poly and Guardian Auction both have had very lackluster sales recently, with works by top selling names, such as Yue Mingjun, not selling, and the paper says that the auction houses are in “a very fragile state.”Not only contemporary art works are affected, traditional Chinese ink brush painting sales have also slumped.
Blaming the collapse of China’s art market bubble on a culture of gambling, collector Xu Shilin told the paper: “Counterfeiting, rampant fake auction transactions, market speculation, prices being artificially high, the real absence of art criticism, the lack of sophisticated market mechanisms, have all resulted in today’s huge collapse of the art market. The collapse is multiplied exponentially by these issues.”
To counter this crisis Beijing Cultural Development Foundation, an arts funding body under the auspices of the Propaganda Bureau, announced it has established a special “Art Beijing fund” which will be used to finance galleries under an “Art Beijing” brand. For 2009 a total of RMB 5 million (USD 730,000) will be available. According to the official announcement the fund has been created “in order to overcome the current difficulties being faced by the art market by providing practical ideas and approaches.” Galleries are encouraged to apply for funding, which will be assessed by an academic committee. Provisions will be made for the promotion of “Art Beijing,” the planning of academic exhibitions, the invitation of overseas collectors, media and similar initiatives, as well as financing primary market gallery exhibitions and related projects.
Lisa Zhou, a project manager for Shanghai Cultural Development Foundation, and General Manager of Shanghai E Arts Festival said: “This economic situation, it’s a huge shuffling of the cards, both high and low cards, so the names will change, but afterwards, we are confident the market and the arts will still remain.” Shanghai Cultural Development Foundation has an annual budget RMB 150 million budget (USD $25 million) Zhou said. It has yet to announce a similar initiative to Beijing.
Commenting at a recent seminar in Beijing Wang Huang Shen, director of Guangdong Art Museum, home of arguably China’s most important art event the Guangzhou Triennial, commented: “this issue of a hot or cold market as experienced by these galleries in Beijing 798 essentially for us in Guangdong is neglible.” Guangzhou, capital of Guandong Province, adjacent to Hong Kong only has two commercial galleries of note.
Also, despite the downturn, new galleries are also opening. In mid-January Elizabeth de Brabant will open a new gallery in Shanghai, and Guangzhou’s Vitamin C opened a new space in Beijing’s Jianwai Soho area. Shanghai Sculpture Space’s management company, Red House, has also just opened a large creative park in Shanghai’s Baoshan district.
Also counter to the market woes of China’s art scene, one of China’s top selling artists, Wu Guanzhong, who will have a seminal series of solo shows in art museums in Shanghai, Hong Kong and Singapore beginning in mid-January, announced he will donate 160 works, with 85 works being gifted to Shanghai Art Museum.
Following various queries regarding the below paragraph in this article Urs Meile Gallery asked me to publish their statement below which follows the quote. Very enlightening.
“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 art of his body, and create an object. It might eventually kill him,” Colonnello said.”
Statement from Urs Meile Gallery:
Evidence proofs that He Yunchang is not blind from a previous performance. The performance “Eyesight Test” (2003) was an event in which He Yunchang fixed his eyes on a 10,000 w light for 60 minutes to purposely weaken his vision. As expected, in that occasion He Yunchang suffered a loss of sight which is something absolutely different from a condition of blindness.
In fall 2009 Galerie Urs Meile, Beijing, is planning an important one-man show by He Yunchang: the exhibition will feature a selection of earlier works by the artist, as well as some new works resulting from a recent performance (August 2008) that was held behind closed doors and out of the sight of the public. The above-mentioned performance did not jeopardize the artist’s physical condition more than a common cosmetic surgery and did not affect any vital organ. The performance was not more dangerous than other performances the artist did in the past, as for example “Cast” (2004), in which the artist decided to stay in a cement block built ad hoc for 24 hours, or “Dialogue with Water” (1999), where He was hung upside down from a crane and cut the river behind with a knife for 30 minutes, causing to himself 1cm deep cuts in both arms. He Yunchang’s performances deal with existential questions and are generally aimed to willingly stress and weaken the artist’s physical and psychological condition. Each of the performances by He Yunchang requires a detailed planning, psychological and physical preparation, as well a recovery period that can vary in time. Being highly individual expressive instruments, He Yunchang’s performances are not aimed to create shock in the public or cause a sensation in the press. The target of Galerie Urs Meile is is to create an exhibition that is representative of the high quality works by He Yunchang.
Shanghai Eye is now going to join the rest of China and disappear for a couple of weeks….
Happy year of the Ox
Review of the painting here
Putin’s deft canvas, titled Pattern, fetched 37 million roubles (about $100,000?) at a charity auction in St Petersburg – 32 million more than its reserve price. The work was sold together with paintings by other Russian celebrities to raise money for children with cancer. The sale price is thought to be a record for the sale of a painting in Russia.
Report here (with video)
After becoming one of the hottest things in the art world over the last decade, galleries are now struggling to sell pieces, works are failing to reach minimums at auction and artists are having to rethink their choice of career…
Many had expected a slowdown in the market after years of explosive growth, but the slump currently hitting the global economy has had a much bigger impact than anyone had foreseen…
According to climate specialists we are looking at a dramatic change in sea levels in the not too distant future.
Sustained warming of at least a few degrees (more than approximately 4° to 13°F above average 20th century values) is likely to be sufficient to cause the nearly complete, eventual disappearance of the Greenland ice sheet, which would raise sea level by several meters.
Apparently this is looking likely to happen:
Hansen’s institute monitors temperature fluctuations at thousands of sites round the world, data that has led him to conclude that most estimates of sea level rises triggered by rising atmospheric temperatures are too low and too conservative. For example, the Intergovernmental Panel on Climate Change says a rise of between 20cm and 60cm can be expected by the end of the century.
Science daily has some more recent data here.
This is what Shanghai will look like with a few meters of sea level change (ie. wet)
However, Hansen said feedbacks in the climate system are already accelerating ice melt and are threatening to lead to the collapse of ice sheets. Sea-level rises will therefore be far greater - a claim backed last week by a group of British, Danish and Finnish scientists who said studies of past variations in climate indicate that a far more likely figure for sea-level rise will be about 1.4 metres, enough to cause devastating flooding of many of the world’s major cities and of low-lying areas of Holland, Bangladesh and other nations.
The next installment of BBc’s Art made in China is online for a few days. The presenter is one half of the old spitting image team, Roger Law. The interviews are all from about a year ago…