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

resale royalties for artists have not yet been fully integrated Strait Islander communities. Similarly, in the EU, the
into China’s legal framework governing copyright. implementation of Directive 2001/84/EC has been key in
In 2023, the market saw a decline of 11.7% to ensuring that artists share in the economic success of their
AUD11.2 billion in sales, yet it maintained its position works, thereby fostering a more equitable art market. For
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as one of the world’s most important art hotspots, second instance, in France’s 2014 auctions declared to ADAGP
only to the US. The rapid development of this market, under the resale right, EUR 5.9 million in royalties were
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particularly in the contemporary Asian segment, poses distributed among 3246 artists and heirs from a total
risks associated with pursuing higher auction values for auction value of EUR 205 million, showcasing the tangible
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new works. This risk can create unsustainable pricing, financial impact of the system. While the average amount
potentially leading to career damage. Conversely, not of resale rights paid was around EUR 3218 per author,
adjusting to these higher market values can result in these data indicate a varied distribution, highlighting both
significant financial opportunities being missed, leading the widespread impact of the scheme and the disparities
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to frustration and potentially harming the relationship within it. Such statistics from the European context
between artists and their galleries. 47 provide insight into how the directive has influenced the
art market, benefiting a substantial number of artists and
Despite the evident need for a resale royalty scheme their estates.
to protect artists’ moral and economic rights in this
burgeoning market, China, similar to the US, does not In the UK, the implementation of the ARR has marked
currently have such a scheme in place. The presence of a significant step toward recognizing and compensating
major auction houses, such as the Poly Group, a state- visual artists for the ongoing value of their works in the
owned enterprise, and the world’s third-largest auction art market. Managed by the design and artists copyright
house, further complicates potential implementation. The society (DACS), the ARR framework in the UK illustrates
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state ownership of such a major market player adds another the tangible benefits of such a system for artists and their
dimension to the considerations around implementing a estates. In 2023 alone, DACS distributed GBP 10.1 million
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royalty scheme. 49 in ARR royalties, benefiting 1893 artists and estates. This
achievement underscores the efficacy of resale royalties
In summary, while there is recognition and movement in providing financial support to artists, highlighting the
toward incorporating droit de suite in Chinese copyright potential for similar systems to be adopted and adapted in
law, the process is still in its nascent stages. The unique other jurisdictions to enhance artists’ economic rights.
dynamics of the Chinese art market, coupled with
influential state-owned enterprises in the sector, present Despite some perceptions that collectors might oppose
distinct challenges to the implementation of a resale royalty resale royalties, many recognize and embrace the value of
right in China. This situation stands in contrast to Western supporting artists. Collectors benefit from the reputational
markets, where the establishment and enforcement of such reward of being art patrons, contributing to the sustenance
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rights have seen more progress. and creation of new work. This perspective aligns with
historical precedents, such as Gertrude Stein’s patronage
2.4. Strengths and limitations of current systems of Picasso, demonstrating how early support can catalyze
The implementation of resale royalty systems, or an artist’s career. In contemporary times, galleries that
droit de suite, across various global jurisdictions, presents transparently incorporate ARR labels in their pricing at
a diverse picture of successes and challenges. This analysis art fairs, like Frieze Masters, are fostering new collecting
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delves into the effectiveness of these systems, exploring habits and attracting new collectors to the market. This
their strengths and limitations in the US, the EU, Australia, not only contributes to the artists’ financial well-being but
and China. also plays a crucial role in promoting cultural diversity by
supporting the creation of new works.
2.4.1. Advantages of current systems Increased market transparency is another significant
The implementation of resale royalty systems across various advantage. In regions implementing droit de suite, there is a
jurisdictions significantly impacts artists, collectors, and notable uptick in market transparency, which is particularly
the broader art market, bringing a multifaceted array of beneficial in markets like Australia. The transparency
benefits. A paramount advantage of these systems is the afforded by such systems reveals valuable data about the
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economic upliftment they provide to artists. In Australia, art market, enhancing fairness and understanding. The
for instance, the Resale Royalty Right for Visual Artists global recognition of the resale right, as enshrined in the
Act 2009 has been instrumental in generating substantial Berne convention, extends its benefits beyond national
royalties, particularly benefiting Aboriginal and Torres borders, providing international protection for artists.

Volume 3 Issue 1 (2025) 6 doi: 10.36922/ac.2875