For many observers of the auction market, 2010 was the year of the mainland Chinese collector. From Hong Kong to London, new and existing collectors pushed prices to greater heights for everything from fine wine to Chinese antiques and paintings, in many cases squeezing their Western counterparts out of the market. Though they had attended auctions in earnest for years, mainland Chinese collectors rose in prominence (and visibility) in the wake of the global financial crisis, when prices dropped dramatically for market segments across the board, including Chinese contemporary art, a segment that had been red-hot and dominated by Western collectors.

Over the past two years, the buying power of mainland collectors has continued to grow, the result of a “perfect storm” of contributing factors: on the financial side, concerns about inflation, and about the stability and convertibility of yuan-denominated investments and more concrete investments like real estate; on the patriotic side, a desire to “gain face” by keeping Chinese works inside the country or repatriating pieces that had been smuggled, stolen or sold in previous decades and had found their way into overseas collections; and on the cultural side, an interest among many newly wealthy Chinese in the arts and in the social cachet that comes with an admirable art collection. At the same time, the drop in prices for even some blue-chip Chinese contemporary artists in late 2008 and early 2009 offered new collectors a window of opportunity to snap up works and stock their nascent collections with top-quality pieces.

With the health of the global auction market improving, and prices rising---very quickly, for some top artists---it is clear that a very different Chinese art auction market has emerged from the global economic crisis, this time dominated by mainland Chinese collectors. In only two short years, these collectors have proven consistently adaptable, increasingly sophisticated, and singularly focused on quality and long-term investment value. But while certain attributes about Chinese buyers at auction---their uncontrolled spending on French Bordeaux from Chateau Lafite Rothschild or Chateau Cheval Blanc; their preference for antiques from the reign of Qing dynasty emperor Qianlong; their aggressive bidding and indifference toward pre-sale estimates---are largely acknowledged, in the arguably more dynamic and market-shaped world of Chinese contemporary art these collectors (and their preferences) are far more amorphous and ill-understood. This article looks to fill in the blanks about the new Chinese collectors: what is spurring them into the market, how they could be giving rise to a “second boom” in Chinese contemporary art, and why they are likely to remain a dominant force in this market for years to come.

In the wake of the global financial crisis of fall 2008, many arts commentators expressed concern over the health of the Chinese contemporary art market, noting that works by some artists had gone into freefall. Following a mediocre spring 2009 auction season, that autumn saw signs of renewed vigorous activity in the Chinese contemporary art market: Sotheby's and Christie's auctions in Hong Kong, and China Guardian and Poly auctions in mainland China, all reported increased turnout, higher sell-through rates, and final sale prices far beyond their initial estimates. At the fall 2009 auctions at Sotheby's in Hong Kong, Zhang Xiaogang's Comrade (Diptych) sold for US$1.1 million, $405,000 over its high estimate, and Chinese collectors warmed to top artists like Yue Minjun (whose Hats Series--The Lovers sold for $823,000, $372,000 over its high estimate), Liu Ye (whose Portrait of L went for $467,000, or $209,000 over its high estimate), and Zeng Fanzhi (who sold five out of six paintings, all above high estimates). Contemporary Chinese photography, arguably a niche market among Chinese collectors before 2008, fared best at Sotheby's that season, with a 100 percent sell-through rate in Hong Kong.

While buyers continued to favor segments like antiques and ceramics throughout 2009, the overall momentum of fall 2009, powered by mainland Chinese collectors, continued in the first quarter of 2010. Chinese collectors---some of whom had been priced out of segments like antiques or traditional Chinese arts---increasingly turned to contemporary art, specifically “blue-chip” artists, with Zeng Fanzhi, Liu Ye and Zhang Xiaogang emerging as the most popular. By April 2010, when Liu Ye's Bright Road sold to a mainland Chinese bidder at Sotheby's in Hong Kong for $2.5 million, one of seven works to sell for more than $1 million at that particular auction, Bloomberg declared that prices for Chinese contemporary art were “returning to pre-credit-crisis levels.” Spring 2010 marked an important turning point in the Chinese auction market, with the mainland Chinese auction house China Guardian taking in US$311 million over the course of the spring auction series in Hong Kong, beating both Sotheby’s and Christie’s, which sold $256 million and $293 million, respectively. This momentum in the auction world continued into the fall---in November, Artinfo reported that China Guardian grossed $622 million across all categories at its four-day autumn auction series (the highest total ever for a mainland Chinese auction house), with Cai Guo-qiang’s Man, Eagle and Eye in the Sky (2004) selling for $2.7 million in the Chinese contemporary art category. That same month, the average price of Chinese contemporary works at Christie's in Hong Kong reached $183,000, double that of spring 2010. In December, Artprice ranked three Chinese auction houses among the top 10 in the world in its Contemporary Art Market 2009/2010 Annual Report. By the end of 2010, ArtTactic had declared that the Chinese contemporary art market was nearing a “second boom,” led this time by the mainland Chinese collectors and auction houses.

Over the course of two turbulent years, a handful of blue-chip artists survived, and even thrived in the turbulence of the Chinese contemporary art market, while some artists who sold for hundreds of thousands of dollars prior to the global economic crisis were shaken from the high end of the market. What has resulted is a Chinese contemporary art market fundamentally different from that seen as recently as spring 2008: a market in which buyers are focused almost exclusively on artists at the top and bottom ends, with little interest (particularly among Chinese collectors) in the middle market, and which is being actively nurtured and promoted by home-grown Chinese auction houses like China Guardian and Beijing Poly, with their own “preferred artists” and agendas.

Though the gradual growth in prominence of Chinese collectors over the past two years has been well-documented by auction market observers, the actual collectors themselves have proven far more challenging to profile. However, over the course of several auction seasons at which Chinese bidders were noticeably more prominent, three main “categories” of Chinese collectors, and two central attributes, have emerged time and again.

The first category of Chinese collector is the wealthy individual interested in buying for his or her own personal collection. While buyers of traditional Chinese arts or imperial antiques often donate these items to museums in China, collectors of Chinese contemporary art have, on the whole, done so in the interest of building private collections. Occasionally overlapping the first category is the individual looking to diversify his or her investments. With concerns about inflation flaring up in late 2010 and into this year, and concerns rising over the stability of real estate investments or the stock market, some Chinese investors are looking to portable, tangible assets, including art by blue-chip (and virtually always Chinese) artists as well as diamonds, wine, gold and jade. The third main category of Chinese collector, and by far the most rare, is the “super-collector.” This small coterie of high-profile buyers, exemplified by mainland Chinese collectors like Wang Wei and her banker husband Liu Yiqian (who spent an estimated $181 million at art and antique auctions in 2009) and businessman Yang Bin, tend to collect Chinese contemporary art both for prestige and for investment, in some cases with an eye toward opening private museums in coming years.

Though the category in which each Chinese collector fits may differ, two attributes are regularly seen at auctions of Chinese contemporary art. First, an indifference towards price estimates---given that the quality of the piece is right. This is a trend observed by many over the past two years, as high-quality lots by some Chinese artists have sold for many times their high estimates following bidding wars among Chinese collectors. This was most recently seen in the sale of Yu Youhan’s The Waving Mao, which sold for $851,000, nearly seven times its high estimate of $116,000, at Sotheby’s in Hong Kong last October. This disregard for estimates at auctions of quality Chinese contemporary art by predominantly established artists is a key factor in the marginalization of formerly dominant Western collectors, especially at auctions in Hong Kong and mainland China.

The second attribute seen among most Chinese collectors at auctions of Chinese contemporary art is an overwhelming preference for “brand name” artists, many of whom initially made their names on the global stage via Western galleries and collectors. This is a relatively short list, which includes such artists as Zhang Xiaogang, Zeng Fanzhi, Cai Guo-qiang, Liu Ye and Yue Minjun; this helps to explain why prices for artists like Zeng and Liu did not follow the Chinese contemporary market as a whole in dropping after the 2008 global financial crisis. But while these “blue-chip” Chinese artists have been, and continue to be, sought after by Western and other non-Chinese collectors, mainland Chinese collectors have shown some divergence in taste from their non-Chinese counterparts. Though their buying habits are broadly similar to Western collectors of contemporary art, Chinese collectors often shy away from more politically charged Chinese artists, increasingly championing those promoted by mainland Chinese auction houses, such as Yang Feiyun, Shi Chong, Liu Xiaodong and Yang Shaobin.

Aside from a general desire to diversify assets---which has also contributed to their spending at auctions of jewelry, wine and antiques---what is driving Chinese collectors to buy Chinese contemporary art? The first major factor is inflation. With consumer prices expected to rise 4-5 percent in 2011, and with relatively few hedges available to wealthy Chinese in the comparatively tightly regulated Chinese financial market, hard assets like gold, art, wine and antiques have become popular investment vehicles. Bolstered by the Western interest in Chinese contemporary art, and often poorly educated about the value of works by non-Chinese artists, mainland Chinese collectors have turned to works by the aforementioned blue-chip Chinese contemporary artists to guard against the devaluation of their assets.

Another factor is patriotism. As with traditional art and antiques, many Chinese collectors feel a sense of responsibility (and pride) towards “repatriating” works that had previously been in overseas collections, or in preventing works from leaving the country in the first place. This type of buying was thrust into the spotlight in November 2010, when Indonesian-Chinese collector Budi Tek (Yu Deyao) purchased Zhang Xiaogang’s Chapter of a New Century – Birth of the People’s Republic of China II(1992) for nearly $7 million---$3 million above its pre-sale high estimate. Citing a sense of patriotic duty, Tek, who is planning a museum in Shanghai, told China Art News magazine after the sale, “I am Chinese, and I would like the work to stay in China.” While their sincerity is occasionally suspect, similar sentiments have been noted among super-collectors like Wang Wei as well as Singaporean and Indonesian collectors of ethnic Chinese heritage.

The third factor is simple aesthetic enjoyment and an increasing level of artistic appreciation. As mentioned earlier, several emerging Chinese collectors are planning to open private museums in coming years, and others, like Wu Shu, plan to use their collections to advocate better arts education in China. Additionally, the involvement of financial institutions like Minsheng Bank, which launched its first show of Chinese contemporary art at its Minsheng Art Museum in Shanghai last April, has given validity to the concept of collecting art for aesthetic, as well as monetary, reasons. The burgeoning passion for the arts, as opposed to a singular perception that collecting is a purely financial pursuit, indicates a maturing of attitudes toward Chinese contemporary art among many mainland Chinese collectors.

However, the fourth factor driving some Chinese collectors, particularly those new to the scene, speculation, also threatens the market itself. Observers worry that a flood of new collectors may overly inflate the still-recovering market, pushing prices for less established artists to unsustainable highs. However, while unfettered speculation could prove damaging to the Chinese contemporary art market as a whole---as it did in fall 2008---prices for blue-chip artists, whose reputations are more solid, would likely weather most of the turbulence caused by excessive speculation.

With Chinese collectors largely powering the Chinese contemporary art market in 2010, and mainland Chinese auction houses able to procure better-quality works by blue-chip artists, the state of the market this year will likely be one of rising prices at the high end and continued dominance of home-grown Chinese collectors at auction. In the wake of the global financial crisis, coverage of the Chinese contemporary art market may have centered on the drop in overall prices, but in reality, fall 2008 and spring 2009 marked the points at which bubbles were “squeezed out” of the market, as Peking University Professor Zhang Yiwu put it. Works by blue-chip Chinese artists, particularly those with appeal in China as well as abroad---artists like Zeng Fanzhi, Wang Guangyi, Zhang Xiaogang, Yue Minjun and Fang Lijun---will likely continue to rise steadily throughout the year, as increasing numbers of new collectors, driven primarily by inflation concerns, enter the market, nurturing the “second boom” at the high end.

If 2010 was the year of the Chinese collector, 2011 will be the year of the more sophisticated Chinese collector, as bidders become ever more particular about not only whose art they buy, but which pieces. At recent auctions in Hong Kong, Chinese collectors passed up inferior works by sought-after artists such as Cai Guo-qiang, indicating that the work itself---rather than its price---is becoming a deciding factor. At the same time, we will likely see mainland Chinese auction houses sourcing more works by blue-chip artists and accounting for a greater proportion of top-tier contemporary Chinese art sales in 2011. With competitors like Sotheby’s and Christie’s excluded from the mainland market, and more new collectors looking to bid locally, 2011 should be a good year for well-established artists who proved popular with Chinese collectors last year. As such, we should expect very few “new” artists to join the upper echelon of Chinese contemporary artists this year. With competition becoming more fierce for works by blue-chip artists, and inflation fears continuing to drive purchases at auction in mainland China as well as Hong Kong, in 2011 Chinese collectors will likely lean on stability and historical artists, rather than taking a bet on the “next art star.”

Looking further down the road, as the number of Chinese collectors, critics, and curators continue to increase over the next five to ten years, and public and private museums proliferate across the country, we can expect to see a greater acceptance of contemporary art among the Chinese public. However, it remains far too early to tell which artists will be accepted as the most important in the Chinese contemporary art canon. It will take time for Chinese collectors to truly move beyond their traditional art backgrounds, as it has historically in the West. The art of our time is often not recognized in the present moment; this fact is universally applicable, and not simply a Chinese attribute. As with wine, what is needed is time.