The Laws and Unspoken Rules of Investing in the Art Market

By OGP Reporters / Members Contribute File Photos

Oh Good Party

Culture has become main field in economic growth in China, and the vibrant art market has become a useful tool promoting a view of Chinese society as a center of aesthetics and beauty and deflecting the international focus from political and human rights issues. But the legal loopholes in the art market is dangerous which absolve auction houses of any responsibility if a work turns out to be fake.(International unspoken rules)

Just as stocks, investment in Art could perform far better than average. As anyone knows, the value of antiques can rise over time, when particular craftsmen, art styles or art from particular time period become popular. Because each antique or work of art is unique, prices fluctuate wildly. Chinese art is rising because Chinese collectors from the new wealthy class are repatriating works collected in the West.

While the rest of the world bids upon Pollocks and Rothkos, Chinese buyers typically pursue traditional Chinese pieces, some by 15th-century masters.

According to customer feedback, This top-favorite oil painting is Vincent Van Gogh's Starry Night, followed closely by another of his masterpieces, Cafe Terrace at Night. The second artist in the top 20 is Claude Monet. Works like Poppy Field at Argenteuil and Artist's Garden at Giverny are still highly popular. Pablo Picasso, who has two paintings in the top 20 with The Dream and Girl before a Mirror came in at the seventh and the 12th position respectively. Salvador Dali had one painting in the top 20 with Persistence of Memory. The rest of the list are several post-impressionist paintings such as Cezanne's Artist's Father Reading, Edvard Munch's The Scream and Edgar Degas's The Dance Class.

While the Asian aspects of Zhang Daqian, Qi Baishi, Fu Baoshi, Xu Beihong and and others by modern artists, like Zhang Daqian, one of many who have chosen to work in that old style. Even today, the name of Zhang, a 20th-century artist known for his landscapes, is hardly known iternationally outside collecting circles, even though in recent years he has joined Picasso and Warhol as one of the best-selling artists in the world.

The changing point of the Chinese art auction is in May 2011. The revenue generated in The United States auction market for 2012 was $8.1 billion, but for China it was $8.9 billion. in fact, China is stepping forward from socialism to capitalism. Like many luxury businesses in China, the explosion of buyers for art here has been fueled by the pent-up consumerism of the newly rich. In recent years, these sales appeared to have global implications, helping China surpass the United States as the world’s biggest art and auction market.

While some collectors care deeply about their art, even exhibiting it in their own elaborate private museums, many buyers are primarily investors looking to flip a work for profit after objects are sold and resold. Some artwork sold four times at auction in the 10 years. Resale opportunities are a priority for many buyers. They buy them and resell them to wealthy people who "need" them. Whether it is private investment, or business investment, there is more added-value in addition to the profit returns.

Wang Jianlin, chairman of Dalian Wanda Group, continued his buying streak this week, picking up a Picasso at a Christie's auction in New York for $28.2 million to acquire the Claude et Paloma or Two children, which was painted by Picasso in 1950.

“Only an enterprise with culture can understand art and collect the best artwork in the world,” said Guo Qingxiang, the person in charge of Wanda's art collection.

We have to say that Wang is a unique "artist" in the business field.

Culture has become main field in economic growth in China, and the vibrant art market has become a useful tool promoting a view of Chinese society as a center of aesthetics and beauty and deflecting the international focus from political and human rights issues. But the legal loopholes in the art market is dangerous which absolve auction houses of any responsibility if a work turns out to be fake.(International unspoken rules)

“There’s always been forgers on the market, but it’s a matter of proportion,” said Robert D. Mowry, a former curator of Asian art at Harvard who is now a consultant for Christie’s.

“I would say 80 percent of the lots at small and medium-sized auction houses are replicas,” said Xiao Ping, a prominent painter who formerly worked as an authentication adviser to the Nanjing Museum.

It is chilling that counterfeiting is not the only problem. Others include theft related to Chinese cultural relics in museums, the bribery of government officials, and the refusal of money after auctions. But as the market grows, so does its dark side.

In recent years, the Chinese auction associations and relevant departments such as the ministry of commerce and culture have stepped in. They now collect data about malicious buyers and sellers and publish their findings to their deeds. This not only encourages auction houses to blacklist buyers with a no-payment history, but also recommends buyers to publish fraudulent auctions. In fact, The government has canceled or suspended the licenses of many enterprises with different problems, and the buyers who could undermine the credibility of the market must pay a high deposit.

When there is a law to abide and where people remain true to their word, the society can make positive progress.

Postscript

Amongst the OhGoodParty.com collectors online community, collector’s club, and our business partners, we establish trust and collaborations to promote the collection industry collectively. We strive to be proactive in passing on historical and cultural heritage. We strive to preserve valuable legacy for our successors. We strive to share the knowledge of how to make rational investments and collections. We strive to valid and reliable data on the value of these collectibles.