Galleries in mainland China are reeling from strict zero Covid restrictions in the first half of this year. According to the new report by researcher Wu Wenlong, published in the Chinese-language magazine art market, the period that saw severe lockdowns in cities like Shanghai and Xi’an and continued nationwide shutdowns saw sales decline from the first half of 2021 for 77% of galleries, while 19% are remained stable and 4% sold better than last year. Just over a quarter of the galleries surveyed saw virtually no sales in the first half of the year, and 23% saw the value of their sales drop by more than half.
Wu surveyed 26 small or medium-sized mainland galleries: 12 in Beijing, seven in Shanghai, one in Chengdu and one in Shenzhen, and five in other cities. These include the Hive Contemporary Art Center, Taihe Art Space and HDM Gallery in Beijing, and the Shekou Gallery in Shenzhen. While around 70% had planned three or more exhibitions for the period, 38% were unable to organize any and 46% only managed one or two. Nearly 85% of the galleries installed show that they have not been able to open.
Domestic period fairs like JingArt, Beijing Dangdai and Art Xiamen were canceled or postponed, and Covid lockdowns tangling art transportation made overseas fairs difficult to join, even from a distance. Of the galleries surveyed, 85% did not participate in any fair during the period.
Online sales remain early and experimental, according to the report, which 62% of galleries have explored through third-party platforms. About a fifth have developed their own shopping sites using platforms like Weidian, the shopping app linked to popular social media WeChat. For advertising, 85% established their own new media channels through WeChat, Tiktok and other apps.
China’s GDP (gross domestic product) growth of just 0.4% for the locked second quarter of the year has also hit collectors, with 77% of galleries reporting a drop in buyer enthusiasm. However, young collectors, classified in the “post-85” demographic category, born after 1985, were an important new outlet for 46% of the galleries surveyed.
Meanwhile, global and local inflationary trends are driving up costs, and 69% of dealers said their rent was too high; 62% lamented staff salaries and 58% the costs of other operations. More than half of respondents were pessimistic about an improvement in business later in 2022, and 12% said they were considering closing their galleries. State support for the recovery has largely been channeled to big business and state-owned enterprises, ignoring smaller private companies; and 77% of galleries claimed rental assistance or exemption policies.
China’s vibrant gallery scene is the cornerstone of the country’s art market, and its struggles will ripple harshly across the industry, writes Wu, observing that alongside Covid-19 restrictions, dealers Chinese must also navigate an economy plagued by anti-globalization, protectionism, global geopolitics and widespread social disruption.