The history of the development of the oil painting market in China and the problems of its formation

Anchukov Sergey Vasilyevich ORCID: 0000-0003-1625-9220 Doctor of Pedagogy Professor; Department of Architecture, Design and Ecology; Federal State Budgetary Educational Institution of Higher Education 'Sochi State University' Sochi, 94 Plastunskaya St., building No. 2 anchukovserge261@yandex.ru

Introduction

The oil painting art market in China has gone through a difficult development path, now based on a combination of the influence of foreign art and the Chinese art tradition, which can become a source of useful experience for the emerging Russian art market. In this light, the proposed article is aimed at deepening and expanding the issues of the history, theory and current practice of the Chinese art market, which was previously also touched upon by the author ^{[1; 2]}, as well as a number of other Russian researchers. ^{[3; 4; 5; 6; 7; 8]}. It should be noted that in Russian science there is an interest in the Chinese art market, as well as the mechanisms of its existence and overcoming problems.

It should be noted that at the turn of the 20th and 21st centuries, and in many ways during the first quarter of the new century, many Chinese researchers were interested in various aspects of the topic. Moreover, their interest developed within the boundaries of four main areas. The first is related to the philosophical, aesthetic and artistic understanding of fine art in the context of its positioning and functioning in the art market. From the point of view of experts, art is a product of the environment, or rather the macrocosm, formed by such factors as economy, culture and society ^[9]. The second area is related to the study of the history of the emergence and development of the Chinese art market. For example, Wu Mindy and Chang Naiqing point out that the heyday of the Beijing art market during the Ming Dynasty led to the evolution of the art market throughout China, stimulating the development of art criticism and art trade ^[10]. The third group of studies is aimed at studying the place and role of Chinese art in the global art market in the context of globalization processes. Thus, Wang Ziqi, by comparing the development of the art market in Mainland China with Hong Kong and Taiwan, comes to the conclusion that Chinese works of art can enter the world market through Hong Kong, while Taiwan can serve as a source of new experience ^[11]. Wen Xiang puts forward the thesis that globalization is the basic reality that the global art market is facing ^[12]. Wang Fan postulates that as it develops, there is a clear trend towards specialization, industrialization, and internationalization ^[13].

The fourth and most represented area of scientific research in the scientific community combines works related to the economic and sociological aspects of the modern art market within the country. According to the analytical "Art Market Report for 2022" ^[14], the volume of transactions in the period under review at Chinese auctions amounted to 16.5 billion US dollars. It should be noted that this is now the fourth indicator in the entire history of auction trading, second only to the values of 2011 – 18.5 billion, 2014 – 18 billion and 2021 – 17 billion. Nevertheless, as the report notes, there is currently an unprecedented imbalance. Thus, the Asian art market has significantly shrunk, especially the Chinese one. This is due to the three years of the pandemic. In conclusion, it is concluded that the volume of transactions at Chinese art auctions decreased by 34%, falling below 4 billion US dollars for the first time in 10 years.

Wang Shouzhi, in the article "The trend of the 'deification' of the Western fine art market," analyzing the above-mentioned problem, writes that some researchers are critical of the art market and point out that the rapid rise in prices for many works of art is the result of the 'deification' of capital. Moreover, in his opinion, the lack of government control over such a model may pose an even greater threat to the Chinese art market in the future ^[15]. Jin Yin, in his article "A model of financial innovation in the art market: an analysis of the process of creating works and consumer demand," defends the idea that the main role of innovative ways of selling works of art is to move the art market to the financial plane. He believes that in this process, the exchange value of each of the components of the art market is disclosed, while the core of exchanges is to meet the needs of all participants in the transaction ^[16].

The impact of the economic development of the state on the art market, as well as the streamlining of this process, is also an important area of research for Zhao Yanting. The latter postulates that economic development within the country and the growth of well-being are necessary prerequisites for the formation of the art market ^[17]. Ni Jin in the publication "Selected issues of the financial development of the art market in modern China" develops the idea that through the prism of securitization, trust management and insurance of works of art, the development of the Chinese financial market in the field of art represents an important step in the integration of art and capital ^[18].

Researchers also address pricing issues, finding that the financial attributes of the art market are based on a variety of characteristics of the latter, as well as the features of the art market itself; in addition, the assessment of the value of a work of art and pricing differs from other financial assets due to the uncertainty of risks, profitability and properties of the asset ^[19]. Lu Weifeng and Jiang Yongqing show that the NFT blockchain causes overheating of the art market, however, the natural circulation of NFT in the smart contract system, as well as the "system of public self-government" provide a stable tool for discovering and preserving the originality of art ^[20].

Therefore, it can be concluded that Chinese researchers generally focus on analyzing the economic component of the development and functioning of the art market, reveal the processes of integrating Chinese oil painting art into the global art market, advocate government control over the processes of organizing the art market, pricing, etc. The philosophical, cultural, and art history aspects of the history, theory, and practice of the Chinese art market have not been studied extensively enough.

The structure of China's Oil painting art market

Traditionally, the Chinese perceived visual art as something spiritual and sublime, unrelated to the sphere of trade. Oil paintings began to be traded in the period from the mid-eighties to the early nineties of the 20th century, when, thanks to economic development in the regions of Hong Kong, Taiwan and in some countries of Southeast Asia, a certain level of material well-being of the Chinese population was achieved, and as a result, the art market began to acquire the features of order. Following the policy of reform and openness since 1987, economic and cultural ties, art exchanges and art education between the People's Republic of China and foreign countries have gradually expanded. At that time, a small number of works by Chinese artists made in the technique of oil painting were purchased by employees of diplomatic services accredited in China and foreign corporations, and a small part of the works were bought by tourists. Embassies of foreign countries served as platforms for the purchase of oil paintings, where small exhibitions were held during diplomatic meetings. During this period, the price segment of works of fine art in China was significantly lower compared to the prices of works of art in the above regions, and the artistic level of oil paintings by Chinese artists was quite high. In this regard, sales agents, art galleries and collectors sought to acquire works by Chinese artists.

As the policy of reform and openness has been continuously taking root in China, there has been an increasing interest in China in the world, and a growing desire to get to know the phenomenon of Chinese progress. The Chinese art market was truly set in motion when, in 1993, the trademark of the Chinese Jiadegan International Auction Company was approved. This company initiated the auction trade of oil paintings and sculptures in China and for the first time fully presented the works of Chinese artists in oil painting techniques to the world community. This event led to a rapid expansion of the degree of fame of Chinese oil painting inside and outside the country, and the acquaintance of Chinese collectors and investors with the works of contemporary Chinese artists.

In the late 1990s, the development of the Chinese gallery industry consolidated the foundation of the oil painting market, and led the art market to enter a phase of unification and institutionalization. Of course, auction companies and art art galleries were mainly concentrated in Beijing, Shanghai and other megacities, this was explained by the pace of economic development of these regions. As we enter the 21st century, some foreign art galleries, seeing good prospects for Chinese economic development, began to enter the Chinese art market one by one.

The Chinese oil painting market began to develop rapidly in the nineties of the 20th century. Its undoubted feature was the combination of different forms of the art market structure, which included successively established specialized art galleries, which are the main ones on the primary market, art auctions, which are the main ones on the secondary market, art exhibitions, which are the main ones on the semi-primary market. All of them divide spheres of influence and mutually harmonize the structure of the Chinese art market.

The emergence of Chinese art galleries in the art market

The first stage is the initial period of China's reform and opening-up policy. At this stage, as the political, economic and cultural spheres were streamlined, organizations for the sale of works of art were recreated like traditional art stores, however, due to the lack of new regulatory legislation and legal acts and reliance on outdated provisions and policies, the scale and pace of development of the art market were subjected to large-scale restrictions.

The second stage covers the entire period of the eighties of the XX century. At this stage, in conjunction with the process of deep economic reform in China, the art market has achieved rapid development. It should be noted that the prices of works of art in art galleries and art stores have increased. Buyers of art works - foreign trade organizations laid the foundations for the powerful development of China's tourism sector, which in turn led to the development of art galleries and the art market as a whole.

The third stage covers the entire period of the nineties of the XX century. At this stage, specialized art galleries in China were born. During this period, art galleries moved away from the forms of traditional "art shops" and "art shops" for tourists, and switched to a modern management model. An undoubted indicator of this was the international trading system and the widespread involvement of artists' sales agents in the art business. Thanks to this system, major changes were introduced in the so-called "sale" of works of art, which began to depend on the artist's reputation, which became the main principle determining the value of the works of an artist.

The fourth stage covers the period from 2000 to 2020 of the 21st century. This stage is characterized by a rapid growth in the number of art galleries. It should be noted that this manifested itself not only in a sharp jump in the number of specialized art galleries, but also in the fact that some specialized galleries entered a phase of so-called profitability, and even attracted a large number of foreign capital. Mainly in urban economically and culturally developed centers and specialized art galleries, the so-called "art gallery districts" have formed. Attention was drawn to contemporary Chinese art and emphasis was placed on mutual ties and contacts between Chinese and foreign art, and importance was attached to revealing the meaning of art in the Asia-Pacific region. It should be noted that Russian artists were an integral part of the exhibition events and the oil painting art market in China.

Chinese art auctions dating back to the 1990s

After the founding of new China, the last remaining auction in Tianjin was closed in 1958. In 1986, following the policy of reform and openness, after 30 years of hiatus in the auction industry, Guangzhou restored and established the first auction, the Guangzhou Auction House. 1996 was the most important year in the history of the auction industry in China, the proclamation of the "Auction Law of the People's Republic of China" became a milestone in the commercialization of the auction industry in China, its institutionalization internationalization as a special new historical stage. Against the background of these circumstances, the gradual progress of the auction market of artistic works in China begins. The development of China's art auction market can be divided into three stages:

The first stage covered the years 1992-1995, and marked the beginning of the formation of the auction market of art works in China.

The second stage covered the years 1996-2002, and marked the steady development of the auction market of art works in China. During this period, the auction market of art works in China achieved high results in terms of organization and management, systematization of the sphere of economic activity, increasing profits from sales and other areas of the art business, demonstrating internal stability and the ability to perspective progressive development.

The third stage covered the years 2003-2020, and marked the accelerated development of the auction market of art works in China. At this stage, the auction market of Chinese art works, in addition to organizing the quality of the organization of activities and management of economic activities and increasing profits from sales at auctions and other areas of art business, demonstrates continuous and rapid expansion of spheres and areas of activity and development in the domestic market, as well as in the field of entrepreneurship, is moving closer to the global art market, the centralized auction market of Chinese art works in Beijing and Shanghai, as the main activity.

Chinese art exhibitions dating back to the 1990s

The development of exhibition and exhibition activities, dating back to the nineties of the 20th century, can be divided into three stages:

The first stage is characterized by the beginning of exhibition and exposition activities. The event of 1993, when the "First Exhibition of Chinese Art Works" was organized in Guangzhou, became symbolic. This first exhibition was called the "Guangzhou Art Fair" of China at that time. It replaced the model of the exhibition of previous days, organized with government-allocated money, and the Academy of Painting, art galleries, and art sellers simultaneously participated in it. It was also important that this was the first exhibition of Chinese art, the main purpose of which was openness, the nature of the exhibition was international. Subsequently, exhibitions of Chinese art gradually but steadily developed and progressed. In the mid-nineties of the 20th century, major urban centers such as Shanghai and Guangzhou began to organize art exhibitions one after another.

The second stage was exemplary. A symbolic event took place in 2004, when an exhibition of the China International Gallery was organized for the first time in Beijing at the China Science and Technology Exhibition Center (CIGE). This was the first time that the exhibition of the China International Art Gallery developed and adopted fundamental approaches to the selection of works of art participating in the exhibition and standards for the design of works of art, in order to solve the main task for the participants of the exhibition to develop mechanisms for the sale of works of art.

The third stage marks multiplicity. A symbolic event was the "Exhibition of Contemporary Art, Beijing Art" organized in 2006 at the Beijing Exhibition Pavilion, the "International Exhibition of Contemporary Art, Shanghai Art" organized in Shanghai in 2007, and the "Exhibition of Contemporary Art, Hong Kong Art" organized in Hong Kong in 2008. The organizational structure of the expositions currently being held has the character of an increasingly developing internationalism. In addition, if we take the expositions "Beijing Art", "Shanghai Art" and "Hong Kong Art" as examples, we can say that the art of China of the 21st century tends to develop diversity. On the other hand, a major exhibition turns into an action, the exhibition really integrates into the local urban economy, into its cultural pulsation, turns into a cultural brand of the city and becomes an important part of the cultural industry, creativity, marketing, improvement of the urban environment, and also has obvious practical significance for enhancing humanistic culture.

Problems of development of the oil painting art market in China

Oil paintings are a relatively new phenomenon in the Chinese art market in the first quarter of the 21st century, and over time they are increasingly attracting the interest of fine art connoisseurs. It is quite obvious that Chinese oil painting has a huge potential in the field of art business development, but currently the share of works made in the technique of oil painting is unusually small, compared with the market of antique, calligraphic works and traditional Chinese paintings. The main problems of the formation of the Chinese oil painting market include the relatively late emergence and relatively short history of the development of this type of fine art. But besides the main ones, there are a number of factors that deserve in-depth study of the question, why has the Chinese oil painting market still not reached full development?

The first problem of the insufficiently high level of development of the modern oil painting market in China is the lack of understanding by Chinese collectors and art lovers of this relatively new type of painting, as well as insufficient artistic education of potential buyers. People will actively collect and invest in oil paintings only if they have a sufficient understanding of this art, if they are able to receive aesthetic pleasure from contemplating oil paintings.

China is a country with an ancient tradition of collecting, and there is an unusually wide involvement of the general public in art collecting. Antiques, works of traditional Chinese painting and calligraphy are usually collected in China, people have accumulated knowledge and experience of visual perception of these traditional Chinese works of art, and an understanding of the artistic and commercial value of such collections has been formed. Oil painting and other types of modern European fine art that came to China a hundred years ago are not yet fully understood by Chinese art connoisseurs. The conclusion is that the formation of the modern oil painting market will seriously stimulate the development of art education and upbringing of the Chinese population, which will eventually affect the formation of the art market in China.

The second problem lies in the organization of effective intermediary structures between artists and collectors, such as auctions and art galleries. It should be noted that fake works of art, speculation, price gouging, and other similar phenomena in the market of traditional works of art, calligraphic and pictorial antiques, as well as oil paintings, are seriously damaging the development of the art market. Auctions and art galleries should take precautions and remain principled in such matters, and the nascent oil painting market should not be jeopardized for short-term gain. Art galleries and auctions are the link between collectors and artists, they are the "heralds" of the oil painting market, who are obliged to anticipate and plan commercial benefits for the long term, take their business reputation seriously, and conduct business based on high moral principles.

The next problem is the lack of government support and stimulation of the development of the market of modern oil painting art. Government agencies of the People's Republic of China, as leaders and coordinators of the art market, should pay close attention to the trends in the development of the modern art market and develop an appropriate regulatory policy. China's tax system should be particularly improved, namely, laws should provide for the possibility of full or partial exemption from taxes on purchases and donations of art objects. Large companies and consortia participating in the art market should also have tax incentives so that they can invest in fine art collections, participate more actively in the construction of public facilities that will be under the jurisdiction of newly built and commissioned art galleries or museums, and invest by donating works of art to both newly built and commissioned ones. and existing art galleries and museums. Thus, investment companies can not only insure themselves against inflation, but also gain a certain social reputation. Attracting capital to the developing art market will stimulate its development at a faster pace. It is necessary to pay attention to other related industries, for example: the production and manufacture of picture frames, the manufacture of art materials, the publishing industry, and others. It is also necessary to optimize property taxes and taxes on the personal income of artists, the income tax of intermediary organizations and other numerous areas to exempt from part of the tax deductions.

Another problem of the development of the oil painting art market in China is the variability in the activities of collectors. Currently, there are more and more collectors collecting works of modern oil painting, but they are still very few compared to collectors collecting works of traditional folk art. These people represent the modern elite of Chinese society, they certainly have sufficient wealth, excellent education, and, moreover, they have the confidence generated by knowledge and determination to be part of the new oil painting art market. They are collectors in the true meaning of the word. But, due to the fact that the oil painting art market is developing, there are individual collectors who happen to be in this market, suddenly appear, and just as suddenly disappear, such random collectors are usually confused by the phenomenon of speculation taking place on the market.

Conclusion

So, how can a collector or just an art lover rationally use the limited means available, and how to choose the right works of art among the numerous works of art presented in various genres that are truly admirable? To do this, the collector needs to continuously study, simultaneously conduct research on the modern art market, cooperate with auctions, specialized art galleries and experts with a good reputation.

The article is published in the version approved by the reviewers (after receiving a positive review recommending the manuscript for publication) with corrections made by the author (after receiving the editor’s comments, if any).
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