Western Auction Houses’ Unlikely Role In Promoting China’s Soft Power

Movies get most of the popular attention when it comes to the cultural front in China’s drive to raise its global soft power. But we are reminded today of the role fine art and antiques can play, and of the need for the country’s artists to establish themselves as international brands.

Last year, China accounted for nearly one quarter of the $61 billion global art market, according to the TEFAF Art Market Report. Its $15 billion of sales were second only to those of America artists. Two thirds of Chinese artists’ sales came at auction, with more than two-thirds of those sales taking place within the country.

Art Net, an online auction and arts news site based in New York, has now totted up which modern and contemporary Chinese artists have been the biggest money spinners at auction over the past three and a half years. The bigger the sale; the higher the international profile.

Topping its list is the late Wu Guanzhong, whose landscapes have given him the title of the father of modern Chinese painting and whose works have realized $510 million over the period under review, including the $23.5 million sale of a 1973 oil on paper landscape, the most expensive individual work. Zao Wou-Ki, the French-Chinese abstract artist who died last year, is second with auction sales of $417.6 million. Third is the highest ranked living Chinese artist, Zeng Fanzhi, at $226 million.

Art Net also notes that the international auction houses, Sotheby’s and Christie’s, are accounting for an increasing share of sales. Local salesrooms such as Beijing A&F Auction, Poly International and, in Taipei, Ravenel are being squeezed out — further evidence that, as the U.S. has found with Hollywood, the market may be a more powerful arm of cultural diplomacy than state-sponsored organisations such as the Confucius Institute.

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Jack Ma’s Open Sesame For The Wide World

IT IS EASY to overdo the symbolism in the fact that the biggest tech company listed on a U.S. exchange will soon be Chinese. Jack Ma’s e-commerce giant, Alibaba, is expected to to be valued at at least $163 billion after its forthcoming initial public offering on the New York Stock Exchange, eclipsing the $100 billion valuation Facebook achieved with its IPO.

If the share sale raises the expected $21.1 billion, and that would be a conservative sum given some of the hype that has preceded the newly filed prospectus, Alibaba’s would set an new high-water mark for a technology IPO, and be the third largest IPO from any sector. If pre-sale demand for its American Depositary Shares proves to be exceptionally strong, the offering might be repriced so that it topped the record $22.1 billion that Agricultural Bank of China raised in July 2010. Final pricing is expected during the week of Sept. 15th.

For now, the company’s business is China-centric, and is being touted to foreign investors as a way to tap China’s economic rebalancing with the expectation that e-commerce will take an increasingly larger slice of a growing pie of consumer consumption, though prospective investors should note that rivals such as Baidu, Tencent and JD have growing aspirations to loosen Alibaba’s grip on the wallets of the country’s growing middle class. But in a letter to investors, Ma made plain his global ambition. “In the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how much progress we bring to the world.” It is then that the symbolism will take on more substance.

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The Blackmail News

THE INVESTIGATION OF staffers from the 21st Century financial news website in connection with allegations that they were involved in efforts to blackmail companies in return for favorable news coverage prompts a reminiscence from our man in Tokyo. Back in Japan’s go-go years in the 1980s, yakuza worked a similar extortion racket. They would inform a business that they had produced a special-edition newsletter or magazine — no web sites then — devoted to the affairs of that company. Needless to say, the tone of the coverage would not be flattering. An appropriate payment would ensure that the edition could be bought up or pulped in its entirety. Eventually, the system was refined to eliminate the printing and pulping, if not the payment.

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Beijing Seen From Space

THIS BYSTANDER HAS only recently come across the photographs that U.S. astronaut Reid Wiseman has been tweeting from the International Space Station. This one of Beijing taken earlier this month is almost a work of art.

 

beijing-photographed-from-international-space-station

 

You can see more of Wiseman’s stunning space photography on his Twitter feed

 

 

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Drought Hits Northern China, El Niño Threatens Worse

EL NIÑO, THE periodic warming of sea-surface-temperatures in the Pacific, is already if prematurely being blamed for the worst drought to hit northern and central China in 60 years. State media says more than 27.5 million people are facing water shortages across at least six provinces.

Previous El Niños caused flooding in the southern rice-growing regions, as they did so disastrously along the Yangtze River in 1998, even as they brought drought to the wheat-growing provinces of the north. The extreme weather produced by El Niño in 1876–77 caused one of that century’s most deadly famines across Asia, with 13 million people dying from hunger in northern China alone.

While the latest El Nino conditions are only just starting to form in the Pacific, they are exacerbating the hot, dry weather in northern China, which was already suffering from serious water shortages as a result of years of deforestation, industrialization and urbanization.

The previous El Niño in 2009 triggered a sharp fall in wheat output. State media say that drought in Liaoning Province has so far devastated 2 million hectares of crops. An El Niño would ratchet up that number significantly.

Drought is also severe in Jilin, Inner Mongolia, Shaanxi, Henan and Hubei, affecting a further 2 million hectares of crops. The overall effects on harvests could be significant. A break to a run of 11 consecutive years of rising wheat harvests looks likely. The key question is whether this turns out to be a short El Niño lasting a few months, or a more long-standing event lasting as long as a couple of years.

China is not alone in being affected by El Niño. The net effect around the Pacific could be to cut global grain harvests by upwards of 2%. Sugar, beef, cotton, palm oil, cocoa and coffee output could also be hit, pushing up prices of those commodities. China’s cotton fields are south of the Yellow River, and like the rice paddies, subject to El Niño-related flooding.

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A Dog Of A Knock-off, Or Shiny Innovation?

THIS BYSTANDER WAS amused to read recently of copies of the shiny stainless steel Balloon Dog sculptures made by the American artist Jeff Koons being offered on Alibaba by Vincentaa Landscape and Architect (VLA) Sculpture, a company based in Shijiazhuang in Hebei.

We filed it away as just another tale of a cheap knock-off albeit it with a wry twist given that Koons’s artistic reputation is based on the reproduction of everyday objects. But news now comes from Art Net, the source of the original story, that the company is now producing resin versions because its stainless-steel knock-offs have proved too expensive for many of its customers.

We now see this story as a parable of frugal innovation: a high-priced Western product for which there is high consumer demand being made affordable by innovation in the manufacturing process, in this case by figuring out how to make the statues out of resin. As a result, VLA Sculpture is able to offer its largest version of the statues, which is slightly scaled down from the originals, for $2,925 as opposed to the $5,850 it is charging for the ones in stainless steel. It also offers even smaller versions of the statues for as low as $550, though for the smallest ones steel appears to be cheaper than resin. (Full price list.)

Last November, a (genuine) Koons Balloon Dog – the orange one; there is also a blue, magenta, orange, and yellow — went under the hammer at Christie’s auction house for $58.4 million, a record price for a living artist. Getting the big nut out of the cost – the IP – still seems to have been done the old-fashioned way, however.

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Zhou Anti-Graft Probe Tests Limits of Xi’s Power

IT COMES AS little surprise to this Bystander – or to most others – that former security chief Zhou Yongkang is under investigation. The announcement that Zhou is suspected of serious Party disciplinary violations – for which read, serious corruption – only formally confirms rumours that have been circulating for months – rumours that were informally confirmed by Zhou’s disappearance from public view since last October and investigations of his family and dozens of associates in the oil industry and security circles.

As tigers go, Zhou is the biggest to be brought down by an anti-corruption campaign since the time of the Gang of Four; he headed the Ministry of Public Security until his retirement in 2012, oversaw the state oil sector, and was a member of the Politburo standing committee.

By disgracing such a senior powerbroker, albeit one past the zenith of his political power, President Xi Jinping is sending a clear signal to both his political adversaries and to the public: his anti-corruption campaign will be wide-ranging and no mere exercise in frightening off political rivals, though it is certainly that, too. Zhou was a supporter of Bo Xilai, the former mayor of Chongqing who was given a life sentence last year for corruption and abuse of power after challenging Xi for the leadership. He also remained a powerful figure in the state oil industry, and thus an obstacle to Xi’s economic reforms.

Zhou’s investigation will also be seen as Xi signaling that he believes he has consolidated his power sufficiently that no official or politician is beyond the reach of his anti-corruption campaign. That is a message that will play well with most Chinese, who are at the sharp end of petty official corruption day-in, day-out. Yet popularity is one thing and political power another. Whether a Party investigation of Zhou turns into court proceedings will indicate how absolute Xi’s political control over the Party has become.

Party discipline means expulsion and house arrest without public prosecution. Zhou’s case indicates that Xi isn’t yet in a position to antagonize all the high-level power brokers and elders in the Party, notably former President Jiang Zemin, by initiating court proceedings that could lead to lengthy jail terms or the death penalty – and the lid being publicly pulled back on the multimillion dollar business enterprises of many of the ruling elite and their families. For now, suffice it to say that the long-standing understanding that serving or former Politburo standing committee members will not be incriminated in anti-graft probes clearly no longer holds.

That is a more startling message for the political elite than the one to lower level officials have had to swallow, that the days of flaunting their perks and privileges and expecting expensive gifts as a right of office are over. So far, according to statement’s by various judicial officials, 51,306 officials were investigated for corruption and related economic crimes in 2013, a twelfth more than in the previous year. That number included 20 ministerial- and vice ministerial-level officials, about half of whom can be considered associates of Zhou.

Xi advocates that corruption threatens the Party’s long-term viability. One common facet of industrializing countries that successfully move up the economic development ladder is that they reform and strengthen their institutions. In China, the Party remains the paramount institution, so reforming that is Xi’s priority. For now though he is emphasizing clean governance over the rule of law, by using top-down political power to set the Party on what he believes is the correct course. The fine line he has to walk is between cleaning up the Party and tearing it down in the process of tearing down his political opponents.

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