Galleries wary of high prices for Korean art

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Galleries wary of high prices for Korean art


An oil painting by Kim Dong-yoo, 41, grabbed lots of attention at an auction at Christie’s in Hong Kong.
The bidding for the piece, made up of miniscule handpainted pictures of Mao Zedong to form a large portrait of Marilyn Monroe, climbed past 100 million won, then 200 million, then 300. Finally the piece, titled “Marilyn Monroe vs. Chairman Mao,” sold on May 28 for 323 million won ($340,000), 25 times its estimated price.
A piece by Choi So-young, 26, who used strips of denim to make a collage of Busan’s skyline, with the Gwangan Bridge stretching from one end to the other, fetched the second-highest bid among the Korean artwork ― 195 million won.
Those were two of the 31 Korean contemporary art pieces that were sold, including two that sold after the Asian Contemporary Art auction.
Alongside the Korean pieces were works by celebrated Chinese artists, including Yue Minjun, Wang Guangyi and Zhang Xiaogang.
Korean art also sold for high prices at Christie’s and Sotheby’s auctions in New York and Hong Kong in 2004 and 2005.
In 2004, the total value of auctioned Korean art was 161 million won, which rose to 771 million won last year and 1.7 billion won this year. 
One would think the Korean art community would be pleased to see Korean artists earning big bucks at an international auction. The reaction here, however, has been one of concern, even anger.
Most artists featured in the auction were relatively unknown in Korea before they became famous internationally; their works sold at prices many times higher than what they would have been sold for in Korea, art experts said. Both of those points are seen by Korean galleries and art critics as a challenge to the existing order, meaning themselves.
“This [controversy] could be due to the contradictory facts that the artists were less known and their works carried high price tags,” said a representative of an international auction company, who spoke on condition of anonymity. “There is the question of unbalance. People complained that we put up works by young artists for sale and raised the prices so high.”
The representative added that the prices suggested by local galleries would have been more appropriate than the final prices awarded in the auction.
The biggest criticism of the auction, however, lies not in the prices but in the fact that most artists presented in it are not well known in the Korean art scene. “There are good artworks applauded by local critics. But the international auctions have nothing to do with this. The auctioneers are putting up the works by artists whose artistic quality is not yet proven,” said Yoo Jin-sang, professor at Kaywon School of Art and Design and also the director of the Kukje Gallery. “Regardless of artistic value, the works that were sold in Hong Kong are the kind that have commercial appeal. It is the market that assesses artistic value, and I shouldn’t complain, but there is a lot of price distortion.”
“Young artists have only recently caught the attention of domestic collectors. Besides that, foreign collectors have more buying power than domestic collectors,” said Chey Youn-seok, a manager at Seoul Auction. “It’s true that for young artists, their works are valued higher in the international market than in Korea.”

Some critics, however, see positive aspects to the fallout from the international auction.
“It’s only the beginning. The auction opened up new options [for Korean artists]. Auctions follow market principles, they don’t conform to the existing order in Korea, and they have many variables,” said Choi Byung-sik, an art professor at Kyung Hee University. “Auction houses such as Christie’s and Sotheby’s do not put up junk for sale.”
“Young artists are more popular in the international market. The new generation of artists may be better suited for the international market. It is the market that decides,” Mr. Choi added.
How the market decides about prices, however, depends greatly on where that market is. In June, Ahn Sung-ha’s “Cigarette,” an oil painting of cigarette butts in a glass ashtray, sold for 14 million won at the Cutting Edge auction for young artists, sponsored by Seoul Auction and held in Korea. A similar painting of the same size, however, sold for 39 million won at the Christie’s auction in May.
Since Christie’s Asian Contemporary Art auction started offering Korean works in October 2004, some artists have seen the value of their works greatly appreciate. “Anchang Village,” (100 by 160 centimeters, about 3 by 5 feet) by Choi So-young, was sold at 14 million won in 2004; “Landscape” (36.5 by 61.5 centimeters) and “World Beyond Windows” (129 by 161 centimeters) were sold together for the equivalent of 56 million won in Hong Kong in May. The other “Anchang Village,” a larger denim collage (200 by 500 cm), was sold at 73 million won in November 2005, while “Kwang-Ahn Bridge” (191 by 728 centimeters) sold for 195 million won in May.
Officials from auction houses such as Christie’s, Sotheby’s and Bonhams regularly visit Korea to shop for art. The auction house keeps 20 percent of the auction award price as well as a 10-percent fee from the buyer. The rest of the proceeds are divided between the gallery and the artist, who often has an exclusive contract with the gallery. The estimated price, or starting price for auctions, is customarily set below the price suggested by galleries, to draw the attention of bidders.
All the Korean artworks sold at international auctions were provided by galleries, not individual artists, the auction house representative said. “We don’t deal with individual artists, because there is an existing system,” the representative said, although some local auction houses bought art works by young artists and sold them directly, an important factor in the reaction of some galleries.
“Auctions have so many ups and downs. Auction houses cannot suggest a stable price. If a work by an artist is sold at an auction at a high price and later the work of the same artist depreciates, the artist might no longer be able to survive in the market,” Mr. Yoo said. “The 323-million-won [price tag] for Kim Dong-yoo’s painting was not a real price. A gallery wouldn’t be able to sell it at that price. Being sold at 25 times more than the estimated price is not normal.”

Kim Dong-yoo’s “Marilyn Monroe vs. Chairman Mao” went for more money than Paik Nam-june’s “Enlightenment 78 RPMs,” a video art piece with a Buddha statue on top of a television set, which was sold for 267 million won in the same auction. According to Mr. Chey, Paik’s works have already established a price range and rarely fluctuate beyond it. The auction sets the price of a work by an established artist no higher than 140 percent of its estimated price, he said.
The auctions also affected the domestic market, raising the value of the artists who were featured in the auctions.
“The booming art market in China is affecting Korean arts as well. They are auctioned at a high price and it is creating a bubble in a short period,” said Lee Hwa-ik, whose gallery deals Kim Dong-yoo’s works. “The prices for young artists’ works have nearly doubled, even tripled,” Ms. Lee said. After the auctions, she said she was was concerned about selling works by Kim Dong-yoo at a higher price.
According to Leehwaik Gallery, the price of his works nearly doubled. For Choi So-young’s works, Cais Gallery said few of her pieces have been sold in Korea because the artist is new to the art scene and has produced only a very small number of works. However, Ju Eun-jeong, the gallery’s manager, said the works by Choi appreciated nearly threefold in international art fairs from 2004 through 2006.
“Even though there was huge demand for her works, they were seldom sold locally. We try to prevent the price from rising too fast,” Ms. Ju said. There are obvious reasons for international auctioneers to prefer younger artists. They tend to be more original and unconventional, but their works are also relatively cheap, making it easier for collectors.
“For foreign collectors, no matter how established these artists are in Korea, none of them are familiar,” the representative said. “At the same time, the works of established artists are very expensive and difficult to understand for foreign collectors. Mostly, we present experienced artists rather than completely new artists in the auctions, unless the works by the new artists are exceptional.”
“They are in tune with the zeitgeist. International collectors seem to appreciate the creativity of young artists. Most young artists study or travel abroad and have a universal sense of the arts,” Mr. Choi said.
Mr. Choi added that it is natural for works that are creative and have artistic value to appreciate. “There is no rule that these auctions should respect the existing order in Korea,” he said.
The representative tried to play down the furor brought out by the auction. “We cannot say that the works by young artists were more expensive than those by more established artists. A handful of artists were popular and their works have appreciated,” the representative said.
To be exact, the “young artists” were not terribly young. Most of the artists presented in the auction are in their early 40s.
Korean contemporary arts are also being lifted by a boom in the international art market, particularly thanks to the huge interest in Chinese contemporary art.
“It was possible because of the power of Chinese collectors,” Mr. Chey said. “Chinese art became popular and so did Korean art. In the beginning, only a handful of Korean artworks were mixed with a large number of Chinese works.”
While the sales in international auctions provoked some critics, it also earned the artists a good deal of attention. A couple of years ago, works by young artists not only had few buyers, they also had little critical support.

Although there were concerns about the works by young artists rising significantly, Mr. Choi said, “The matter is not so straightforward. It is better to say young artists are drawing attention to themselves.”
“There was no market for young artists because there are no criteria yet to assess their works, although they are in the process of being made,” Mr. Chey said. “The size of the pie remains the same, but young artists are carving out a bigger slice of the marketplace, which had been dominated by established artists.”
Artists also spoke favorably about the auction results. “The works by young artists received more favorable reception abroad than they did domestically, and I hope that we can expand our presence abroad,” Kim Dong-yoo said.
“It’s too early to say [what effect the auctions will have]. It is something we should not be surprised at. People are jumping to conclusions. We need to wait and watch a little more,” Mr. Choi said. “You can’t compare the value of the Korean art sold in the auction to that of the Chinese art. It’s less than one-100th of the value of the Chinese art that was sold.”
The auction house representative said the auction has given younger artists more confidence, linked to commercial success. The representative, however, said artists shouldn’t focus on the prices. “Because it was only a beginning, the price of the works increased so much that it created confusion in the market,” she said. “International collectors are rational. If artists try to raise the price, they won’t survive for very long. The price needs to increase slowly. Artists need to keep producing good works.” For all the fuss in Korea resulting from the auctions, the representative said, “It is something new and we just started learning, and we are paying that price.”

by Limb Jae-un
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