May 2012

China Art Law focuses on legal issues and the role of law in the art world in China.  In response to the growing interest both within China and internationally in how law affects art and the art business in China, CAL looks at issues that are relevant to artists, collectors, gallery owners, private dealers, museums, art consultants, auction houses, art fair organizers and anyone else interested in the development of the art business in China.  CAL aims to clarify legal matters for beginners as well as to address sophisticated legal issues affecting distinct segments of the art world, such as copyright, fine art insurance, regulations governing buying and selling art in China, import and export restrictions, and more.

We welcome comments and feedback, and hope to be able to make China Art Law a useful and relevant resource. We encourage you to contact us at Newsletter@ChinaArtLaw.com with your comments and requests.

Chinese Art and Cultural Asset Exchanges Imperiled by Recent Government Measures

The past three years have seen the fast and furious establishment of art exchanges throughout China: the Shanghai Cultural Assets and Equity Exchange, the country’s first artwork exchange, opened for business on June 15, 2009. Following in that model’s footsteps, more art exchanges were set up, and by June 2011, only two years later, 20 art stock exchanges were operating in China. Remarkably, by October 2011, just four months later, 16 more art exchanges had opened or were in the process of being established.

Now, most of the 36 or so art exchanges currently in operation or preparation in China are facing an unprecedented shakeout following a State Council decision, the State Council Decision On Rectification of Trading Exchanges and Preventing Financial Risk, 2011 No. 38, to clean up all trading exchange operations, and large numbers of private exchanges – which includes virtually all of the art and cultural asset exchanges – will almost certainly face financial problems as a result of the measures.

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Opinion on Implementing and Carrying Out the State Council Decision to Strengthen the Supervision of Cultural Property RightsTransactions and Trade in Artworks (2011 No. 49)
 
Propaganda Department; Ministry of Commerce; Ministry of Culture;
State Commission on Film and Broadcast Media; General Administration of Press and Publications
中宣发〔2011 12 30〕 49 号                        
Opinion on Implementing and Carrying Out the State Council                                       
Decision to Strengthen the Supervision of                        
Cultural Property Rights Transactions and Trade in Artworks
 
To the Party Committee Propaganda Department, Departments or Bureaus of Commerce, Culture, Radio and Television and Press and Publication of every province, autonomous region and municipality:

In order to carry out and implement the State Council Decision On Rectifying All Categories Of Trading Exchanges and Effectively Preventing Financial Risks (State (2011) No. 38, hereinafter referred to as the “Decision”), to promote the health and the orderly development of cultural property and art trading, this Implementing Opinion is formulated as follows:

          1.    A cultural property transaction refers to an economic activity in which an owner of cultural property, having the right to own, operate, obtain profits or benefits, and other related rights, transfers all or part of those rights. The scope of transactions covered includes those in the cultural and creative, film and television production, publishing, printing and copying, advertising, performing arts and entertainment, cultural exhibitions, digital content and animation, and other fields. A Cultural Assets Exchange provides the conditions and a professional marketing platform for integrated services for the transfer of cultural property. The principal business activities of an Exchange are policy advice, information, organization of trading, property identification, payment settlement and delivery, all important components of the multi-layered cultural sector market.

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