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Arts & Communication Blockchain and royalties in China’s art market

As of April 2022, the scheme has impressively generated AUD1.99 million, including government funding and
over AUD11 million in royalties. This significant sum administration fees deducted by the collecting society
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has been distributed across a wide spectrum of the artist from collected royalties. As of mid-2014, the scheme was
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community, with more than 2300 artists and their estates expected to reach a breakeven point, where the royalties
receiving royalties from over 25,000 sales. The majority generated would surpass the Australian Government’s
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of these royalties range between AUD50 and AUD500, investment of AUD2.2 million. However, the scheme’s
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reflecting a broad and inclusive impact across different self-sustainability is sensitive to its operational parameters,
sales levels. A key feature of the scheme is its substantial such as eligibility criteria and administration fees. Current
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support for living artists, who have received over 46% of projections suggest that without changes, the scheme may
these royalties. This reflects the scheme’s broad impact, not be self-funding until after 2050. 40
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especially in providing additional income for artists.
In summary, the scheme has brought about significant
A key highlight of the scheme is its significant support changes in the Australian art market. While it has
for Indigenous artists. More than 65% of the participating provided new income opportunities and rights for artists
artists are of Aboriginal and Torres Strait Islander origin, and increased transparency, it has also introduced new
receiving 38% of the scheme’s total payouts. This challenges and costs for artists, art market professionals,
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substantial financial support has positively impacted and consumers. Balancing these impacts remains a key
artists’ communities, particularly in remote and central focus as the scheme continues to evolve.
Australia, where 35% of the artists under the scheme
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reside. The financial benefits flow back into these 2.3.4. China
communities, reinforcing the scheme’s role in fostering In the context of China, the concept of droit de suite or
cultural sustainability and economic empowerment for the ARR has been evolving, albeit at a different pace and
Indigenous populations. under distinct market conditions compared to Western
While the scheme has undeniably provided financial counterparts. China’s first engagement with copyright
benefits to artists, particularly those from Indigenous law dates to the early 1990s, following its accession to
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communities, it has also introduced certain complexities the Berne convention in 1992. However, the Berne
and challenges in the art market dynamics. One notable convention’s provisions regarding resale royalty rights
issue arising from the scheme is the obligation for artists are conditional and not automatically enforceable in
to notify the collecting society within a 21-day window member states, requiring domestic legislation for actual
following a commercial resale. This requirement has implementation.
been perceived by some as restrictive, potentially altering The initial advocacy for resale rights in China can be
the traditional terms of trade and introducing market traced to Zuoren Wu, a former chairman of the Chinese
distortions. Such constraints may lead to a dampening Artists Association. After the enactment of the copyright
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effect on art purchases, as stakeholders navigate the added law in September 1990, Wu proposed the exploration of
layer of administrative requirements. droit de suite at a symposium organized by the National
Moreover, the scheme’s influence has extended to the Copyright Administration. Although the first copyright
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operational models of art galleries, particularly those law took effect in 1991, it was not until the latest draft
specializing in Indigenous art. Many of these galleries have revisions of the copyright law that considerations for droit
shifted toward consignment models, which inadvertently de suite legislation were brought forward by the National
place greater financial risk on artists by reducing their Copyright Administration of China. 41
upfront income. This change indicates a significant shift in Several draft revisions were circulated. The 3 revision,
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the market’s approach to managing Indigenous artworks finalized in late 2012, reportedly included a droit de
and highlights the need for careful consideration of the suite provision, although this draft was not widely
scheme’s broader economic impact. In addition, there disseminated. In the latest amendment of the Copyright
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have been instances where art dealers have leveraged Law of the People’s Republic of China in 2020, there is a
the resale royalty scheme to negotiate lower purchase comprehensive protection framework for the copyrights
prices with artists. This practice raises concerns about of authors of literary, artistic, and scientific works. This
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fair compensation and underscores the unintended law encompasses various rights associated with copyright
consequences that can arise from well-intentioned policies. protection. However, despite discussions and proposals in
Administration costs present another critical aspect draft revisions, this amendment does not explicitly include
of the scheme’s impact. In its 1 3 years, the scheme provisions for the resale royalty rights. This omission
st
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incurred establishment and administration costs of indicates that the specific considerations for implementing
Volume 3 Issue 1 (2025) 5 doi: 10.36922/ac.2875