Art rental businesses could expand cultural markets

Cultural industry insiders have appealed to domestic enterprises to invest more in artwork rental businesses amid the industry's current boom.

"The total scale of the Chinese artwork market has the potential to exceed 1 trillion yuan ($145 billion) in the future, which could feed hundreds of enterprises," said Yang Yungang, chairman of the Beijing Culture Equity Exchange platform.

"The new valuation approach will ignite the Chinese artwork market," Yang added.

Known as art banks, the artwork rental industry is popular in European and American countries.

The past 10 years have seen domestic art bank business operators, civil organizations and major-bank-affiliated private banks attempt to expand the industry in China. None of them have yet made a prominent achievement.

There are two challenges facing the domestic industry, according to Hu Min, general manager of the art bank department at the Beijing Culture Equity Exchange platform.

One is high rental prices, which can be as high as 10 percent of the price of the art itself.

The high price results in a high threshold for companies given the investment amount required.

The other is the artwork price bubble generated through the auction process, which can inflate values by up to 100 times, according to Hu.

"What our company aims to do is to pop the price bubble and return to the appropriate price," Hu said.

In addition to scripts and paintings created by renowned artists, artwork from young artists should also be available via the Beijing Culture Equity Exchange's Art Bank in order to foster the next generation, he said.

"The art bank will foster a batch of outstanding young artists through exhibitions, rental publicity and promotional activities, so as to discover excellent art and then introduce them to broader audiences," Hu said.

"The rise of great powers must be backed by a powerful culture; the great rejuvenation of the Chinese nation must include the prosperity of Chinese culture," Yang said.

Yang said he believes the proper way to inspire the cultural market is to release artwork consumption from its current niche status.

According to the National Bureau of Statistics, an investigation into the 48,000 major Chinese cultural enterprises found that their total combined revenues reached 3.62 trillion yuan in the first six months of 2016, a 7.9 percent rise year-on-year.

Among them, the cultural creation and design industries contributed total revenues of 434.1 billion yuan, realizing a year-on-year increase of 11.1 percent.

The cultural creation industry has become an important driving force behind the Chinese economy's development and urban industry transformation due to its value model, Yang said.

The China Beijing International Fair for Trade in Services scheduled from May 28 to June 1 has highlighted creative culture via a series of promotional activities held by Beijing Culture Equity Exchange.

(China Daily 06/02/2017 page5)