China

Art market boom leads to calls for regulation

English.news.cn   2012-06-14 10:16:46

 

Tuo Zuhai, deputy director of the culture market department of the Ministry of Culture (Photo source: Hao Hongbo/China Economic Net)

By Li Xiao

BEIJING, June 14 (Xinhuanet) -- Once the preserve of the rich and powerful, the purchasing of art works is now much more common among regular Chinese people, from small bargains at Beijing's Pan Jia Yuan flea market to big deals amounting to hundred millions of yuan at auctions.

Statistics show that China overtook the United States to become the world's biggest market for art and antiques in 2011, with trade volumes totaling 195.9 billion yuan (US$30.7 billion). However, the boom has resulted in the unbalanced development of the market and loopholes in terms of both supervision and regulation.

China now leads global art auction sales with both the biggest sales revenue and highest auction results. Conversely, according to Tuo Zuhai, deputy director of the culture market department of the Ministry of Culture, in the primary market for art, the gallery industry in China is relatively underdeveloped, which has produced an imbalanced market structure.

Tuo suggested that China further foster and develop what is currently an immature art market, promoting structural adjustment. "With their rising incomes, Chinese people will show more enthusiasm for art works," he said. "The art market in China still has a lot of room to grow."

Tuo also called for more comprehensive regulations in order to control the Chinese art market. "Given the huge number of art consumers, investors and art lovers in China, the absence of trade regulations has led to various disputes and instances of fraud," he said.

According to Tuo if a consumer buys fake or substandard art works at a gallery, his rights and interests are protected in accordance with the Law on Consumer Legitimate Rights and Interests Protection. But if he gets cheated at an auction, there are no relevant protection regulations in the Auction Law. The lack of fair and open regulations in the art trade has caused continued disquiet among art investors.

The Ministry of Culture is now consulting professionals in both law and the art trade over legislation related to art market management. The draft will regulate the conditions of operating businesses in the art market, define tradable art works and protect the rights of the owner, consumer and traders of art works.

The ministry has also been devising sectoral rules to solve specific real-world problems, which will serve as the foundation of the future Art Law.

Each year, many people try their luck in the art market, but few are armed with the necessary knowledge which might help them to be successful, with some losing significant amounts of money. "The art market is even more complicated than the stock market. An art investor should adopt a rational attitude and do as much research work as one would do before speculating on the stock market," Tuo said.

Tuo suggested that regular consumers should take into account both their interests and realistic price considerations, and invest mainly in contemporary works and artists with fine potential who are currently unknown to the public.

Tuo also commented that in addition, the industry needs to train a batch of professional art agents who would be paid for investing in art on behalf of regular investors. He concluded that the industry should also set rules to regulate intermediary services including the identification and authentication of art works.

(Source: China.org.cn)

Editor: An
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