“This is the challenge right now,” said Wang Yannan (王雁南), president and director of China Guardian, the nation’s second-biggest auction house. “In the mind of every Chinese, the first question is whether it’s fake.”
For years, much of the forgery went unnoticed as works passed from buyer to buyer, their prices spiraling up, but increasingly, high-profile scandals are exposing the extent of the fakery and sowing doubts about the larger market. In one case three years ago, an oil painting attributed to the 20th-century artist Xu Beihong (徐悲鴻), which sold at auction for more than US$10 million, turned out to have been produced 30 years after the artist’s death by a student during a class exercise at one of China’s leading art academies.
Even more embarrassing was the government’s decision in July to close a private museum in Hebei because of suspicions that nearly everything in it — all 40,000 artifacts, including a Tang Dynasty porcelain vase — were fake.
“There’s always been forgers on the market, but it’s a matter of proportion,” said Robert Mowry, a former curator of Asian art at Harvard who is now a consultant for Christie’s.
Concern about fraud and a cooling economy seem to have tempered enthusiasm in the Chinese art market. After peaking in 2011, reported revenues dropped off 24 percent last year, according to Arts Economics, a research company that studies the international market. This year is expected to be modestly better than last year.
The Chinese auction industry and the government have taken notice and say they are looking to clean up the abuses and stem further damage to consumer confidence, especially since the art market is actually perceived by many as one of the safer places to invest.
“A majority of Chinese people do not trust the Chinese stock market,” said Melanie Ouyang Lum, a consultant on Chinese art. “The housing boom has slowed tremendously. A lot of people are looking to art for investment.”
RISING PRICE OF CULTURE
China has also identified culture as a core area for economic growth and a vibrant art market as a useful tool of soft power, promoting a view of Chinese society as a center of aesthetics and beauty and deflecting the international focus from political and human rights issues. The Chinese are handicapped in cleaning up the art market, though, by a weakness in their laws, which absolve auction houses of any responsibility if a work turns out to be fake.
The forgery problem helps account for the soaring number of payment defaults. In the past three years, a study of sales at Chinese auction houses by the China Association of Auctioneers found that about half the sales of artworks worth more than US$1.5 million — a major portion of the market — were not completed because the buyer failed to pay what was owed. (For major auction houses in the US, the default rate for works of the same value is negligible, several experts said.)
“It has something to do with the general environment in China,” association chairwoman Zhang Yanhua (張延華) said. “As you know, China is still trying to build the rule of law in this country.”
The interest in addressing the market’s weaknesses may have played a role in China’s recent decision to loosen longstanding rules that restrict Western auction houses from access to the Chinese market.