New World New Policy: What Art Tells Us About the Global Economy

dafen-oil-painting-villageProfessor Michael R. Czinkota

The modern world of art offers fascinating insights into the forces currently shaping world trade and the global economic system. For decades, China has experienced breakneck economic growth and has become a world leader in both the consumption and production of art, which illustrates some intriguing changes in the global economy.

The global market for high-end, rare art pieces is a good example. In recent years, as China grew more prosperous, there has been a sharp uptick in luxury art purchases by Chinese customers. In 2016, according to insider information, Oprah Winfrey sold a 54”x54” painting to a Chinese collector for $150 million. This example indicates how China has grown in its appreciation of originals. This shift perhaps presages an eventual reduction in counterfeit products for which China is still infamous. Chinese auction houses have also risen to prominence. Of the world’s top ten art auction houses, six are Chinese, and many of the largest art houses are state-owned enterprises.

In the art world, China has not only become a dramatic consumer of art, but also a prodigious producer. The southern Chinese city of Dafen, nearby to megacity Shenzhen which borders Hong Kong, has become the center of knock off art masterpieces. Beginning in the 1980’s reform era, Dafen became a hub for starving artists from around the country to work and train, pumping out high-quality knock-offs of famous European and American painters ranging from van Gogh’s Sunflowers to portraits of Western icon John Wayne. Artists produce these works on the cheap and can offer custom alterations, such as changes to the color or size to fit the purchaser’s own décor. Since the works are not signed, they do not count as fakes.

The producers of export knock-off masterpieces will face pressure to adapt, focusing more on creativity and original works. When Chinese artists copy the great masters, they hone their skills and imagination, which over time will allow them to eventually emerge as new artists in their own rights

The demand for copies of classic masterpieces at an affordable price seems likely to continue – there is no shortage of impecunious art lovers, after all. In the face of low-wage competition from China, what are Western artists to do? The answer is much the same as in manufacturing and other industries – use technology.

Art may seem an unlikely candidate for technology innovation. Advances in artificial intelligence, machine learning, and 3D printing have opened up possibilities previously unimaginable. In 2017, a tech company from the Netherlands is reported to have taught all the core elements of a classic Rembrandt painting – the style of clothes, how he draws the eye, the texture of his brush strokes, to a computer. Through deep learning software, the system was able to compose and “paint” through the use of a 3D printer a “new, original Rembrandt” – a painting in his distinctive style of a person which does only exists as the “imagination” of the computer.

Just as Chinese artists can produce “custom masterpieces” on the cheap, Western art programmers can push out wholly original but stylistically recognizable classics. In art as in the broader economy, the future of global trade competition will be between the low costs of labor in the developing world and the productivity-enhancing technologies of emerging nations.

China’s rise from a global consumer, to the continued mass production coming from its numerous factories, and the growing significance of advanced technologies is reflected by the art world which offers an indication of major global trends. Since changes shaping the global economy continue to accelerate, observers would be well advised to use their China-assembled iPhone to take a picture of the temporary present.

 

Professor Michael Czinkota (czinkotm@georgetown.edu) teaches international marketing at Georgetown University’s McDonough School of Business in Washington D.C. and the University of Kent at Canterbury, U.K. His key book (with Ilkka Ronkainen) is International Marketing, 10th ed., CENGAGE

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