Backyard Pond" by Yue Minjun

The enigmatic self-portraits of Yue Minjun with their jaw-breaking grin are one of the most recognizable images of Chinese contemporary art and, when the going was good, those dealing in Yue's smiling men also laughed all the way to the bank.

But collectors are no longer snapping up Yue's work. After four years of unprecedented boom, some sense is returning to the market.

"The market for Chinese contemporary art had long been overheated. Many artworks and artists are overpriced and overrated, notwithstanding the fact that they are good artworks by good artists. Needless to say, there is a lot of junk being traded as "meaningful' artwork," said Daniel Komala, the president of Larasati Auctioneers in Singapore.

"For good artworks, the bubble has deflated significantly; for meaningless artworks, the bubble simply burst," Komala said. "The market is looking for a new equilibrium, which is somewhere between 30 to 40 percent below its peak."

At Christie's Hong Kong evening sale of Asian contemporary art on Nov. 30 only 18 of the 32 lots sold. Works by Yue, Fang Lijun and Wang Guangyi found no takers, while Zhang Xiaogang's "Bloodline: Big Family No. 2," a large family portrait from the collection of the film director Oliver Stone, sold for $3.4 million, below an already conservative estimate of $3.9 million.

A rare early work by Zeng Fanzhi, "From the Masses, To the Masses," valued by Christie's at around $3.9 million, failed to make its reserve price - in sharp contrast with the May sale when "Mask Series 1996 No. 6" fetched $9.7 million, a record for a Chinese contemporary work.

"The logic of the market is quite simple right now," said Ingrid Dudek, a specialist in Asian contemporary art at Christie's. "Things that are fresh and well-priced will perform well, and things that are pushed too hard or come back at auction quickly may struggle.

"At the end of the day we would have hoped for better, but as with the sales in New York and London over the last month and a half, we're actually very happy that the market is still displaying as much liquidity as it did. For many of these works, clients have put in after-sale offers and many are now being sold."

Still, Dudek said, there was "definitely some kind of correction going on." Financial crisis aside, collectors of Chinese contemporary art appeared to be developing more discrimination. "There was really a moment where everything was high and easy," she said. "That's no longer the case."

In retrospect, Sotheby's inaugural evening sale of Asian art in Hong Kong on Oct. 4 was a turning point. That night, it became clear that top names no longer attracted a blind following, as only 28 of the 47 lots on offer sold. Works by Liu Wei, Wang Guangyi and Yue crashed.

A "Bloodline" painting by Zhang Xiaogang, another iconic painter of the good times, topped the sale at $2.96 million, at the lower end of its estimate, but another from the same series went unsold.

At the Borobodur auction in Singapore on Oct. 11, Yue's "Life Pose," depicting a naked man sitting on the floor, had a relatively low pre-sale estimate of $250,000 but it still did not sell. Early November sales in China confirmed the trend as lot after lot of contemporary work remained unsold at China Guardian's Grand Fall auction, while Beijing Huachen Auctions canceled all its forthcoming contemporary  sales.

Nicole Schoeni, director of the Hong Kong-based Schoeni Art Gallery, said recent auction results would "humble a lot of people."

"I'm in a sense quite relieved to see this happening," she added. "A lot of the speculators are also not getting involved anymore."

Vinci Chang, head of 20th century Chinese and Asian contemporary art at Christie's Hong Kong, also sees a bright side. "This is a buyer's market," she said. "If you have a keen eye and know what is best, this is probably the best time to get the best work at the best price."

Komala said: "As long as the price of the top Chinese contemporary artists such as Zhang Xiaogang and others is still a fraction of Damien Hirst's," the buyers will return.