Like the production of physical commodities, the art market also has different links from production, circulation to consumption, but also has some of its own characteristics. Similar to the concept of the stock market, the art market can also be divided into primary and secondary markets. Generally speaking, the primary market obtains artworks directly from artists, contacts the artists through agents or cooperation mechanisms, introduces them to collectors in the form of exhibitions, and sells the artworks. Art agents, galleries and art fairs all belong to the primary market. The secondary market refers to the market where collectors buy art from the primary market and then flow into the market, that is, the secondary circulation market. Auction companies are the most typical secondary market. Most galleries and brokers are only in the primary market, but there are also brokers and galleries engaged in secondary circulation, which can also belong to the secondary market. Unlike western countries, the distinction between the domestic primary and secondary markets is not clear, because some auction companies not only collect auction items from collectors, but also directly collect works from artists and galleries.
Unlike the art markets in other countries, China's art market presents a cold primary market and a hot secondary market represented by auction companies. According to the "Chinese Art Auction Market Survey Report" released by the Art Market Monitoring Center (AMMA), 219 auction companies in the Chinese art auction market (Mainland, Hong Kong, Macao, Taiwan and overseas regions) achieved a total turnover of 42.842 billion yuan, a year-on-year increase 112.71%,. The data fully shows the prosperity of the Chinese art auction market, but the primary market, that is, the institutions represented by galleries that directly buy artworks from artists, does not have such a prosperous scene.
In fact, there is still a big gap between China's gallery industry and Western countries. This is also the reason for the uneven development of the primary and secondary art markets. The gallery industry has always placed high hopes on people, hoping to make more and better works enter the market through the work of galleries. However, contrary to expectations, due to the lack of effective support and the trust of artists, China's gallery industry has always been on the verge of survival, and it can not play an effective role to promote the development of the entire industry. The works of some artists directly entered the auction market to obtain high prices without the choice of galleries and many institutions. The result is that although they have economic benefits, they have created bubbles and are not beneficial to the development of the entire market.
In some mature art markets in some western countries, the pricing of a piece of art often has to be screened and considered by multiple mechanisms. And eventually reaching the secondary market, even in the auction market, will not be too far from its real market price. However, the inversion of China's primary and secondary markets undermines this price evaluation mechanism, causing some art auction prices to deviate from their accurate market positioning, thereby affecting market trends.
Art value deviates from price
China's art market currently lacks an effective pricing mechanism. The auction company's auction price alone cannot reflect the true value of a certain artwork, and will also give investors who can speculate to make profits to take advantage of it. The value of works of art is not determined by a simple "condensation in the working hours of commodities", but a combination of various subjective factors such as aesthetics, historical value, and humanistic value. Therefore, it is easier for the art market to deviate from its value and price. The inversion of the primary and secondary markets pointed out above is one of the reasons why artworks cannot be properly priced. The greater reason is that the lack of effective pricing mechanisms has caused some businesses to have the opportunity to speculate, borrowing one or two It is not uncommon for auction works to raise the market price of works of art of a certain type or by an artist. And this approach will also seriously affect the investment of ordinary investors, causing investors who do not understand the market to blindly enter the market and suffer losses.
The mature art market should have a corresponding mechanism to help the smooth circulation and trade of art. However, due to short formation time and large capital inflows, China's art market has not yet had time to form a perfect market mechanism. This situation has caused a mismatch between investment inflows and institutions and systems, which has caused various problems.
The integrity of the art market
The fast-growing market has attracted a large amount of capital inflows, and it has also lured some speculators to profit from illegal activities. The wind of counterfeiting is intensifying, and counterfeit products make investors unpredictable. The occurrence of fake auctions in the auction market such as Zhang Xiaogang's "The Little Girl" reflects the integrity of the art market to a certain extent. In order to gain profits, some auction companies ignore the inflow of counterfeit goods, do not emphasize business integrity, and do not consider the interests of investors. What is most shocking is the "Golden Building and Yuyi" incident. The top expert in cultural relics identification in China's cultural relics field colluded with a scammer and offered an estimated price of 2.4 billion yuan to defraud a bank loan, causing the bank to lose 540 million yuan . This exposes how serious the integrity problem of the Chinese art market is. In addition, the buyer's integrity problem has gradually become prominent, and the phenomenon of buyers not paying in the auction market has occurred from time to time, which has also seriously damaged the benign development of the art market.
However, China has not yet promulgated effective laws and regulations to restrict and punish the art market. Therefore, in order to prevent counterfeit products, some investors dare not rush into the art field to invest, and some investors are buying fake art because of counterfeit art. The product suffered huge losses. Therefore, how to standardize the market operation, solve the problem of information asymmetry, and how to prevent the counterfeiters from making huge profits from it is a question of integrity to be solved urgently in the Chinese art market.