And now we'll hear about a market that soared into the stratosphere -contemporary Chinese art. In January, its value had climbed to six times what it was worth five years ago. But like so many other markets, it was driven by speculation and greed, and now that bubble has burst. NPR's Louisa Lim reports from Shanghai.

LOUISA LIM: Back in September, the doors of the SH Contemporary Art Fair had been open just five minutes when the first sale was made. A Chinese businesswoman took that long to part with $40,000 to buy an oil painting from Yan Qing's Gallery.

An abstract work by artist Wang Guangle, it was a blocky, black square with thin white lines straggling across a canvas.

Gallery owner Yan Qing was confident it was a good buy.

Mr. YAN QING (Gallery Owner): (Through Translator) It's not cheap, but the buyer liked it a lot and is very decisive. For good artworks, I don't think it's a bubble; they won't devalue. Each one is an original, so they can only rise in value.

LIM: Oh, how much difference half a year makes. Last year, 11 of the world's top 20 best-selling artists were Chinese, commanding millions at auction.

But in October, as crisis after crisis buffeted Wall Street, Sotheby's sale of contemporary Chinese art bombed. Just 39 of 110 paintings sold.

And since then, things have gotten even worse, according to Brian Wallace from Red Gate Gallery in Beijing, an 18-year veteran of the China Art Market.

Mr. BRIAN WALLACE (Red Gate Gallery): In terms of the overall market, I would say it's probably dropped by at least 50 percent, just in this short period, and we'll see how that pans out over 2009.

LIM: Fifty percent, by half?

Mr. WALLACE: Yes. Yes. The combination of factors, the financial crisis, the number of visitors to the galleries, and the reality that, perhaps because of the bubble, prices were too high. We all knew that that was going to end, but we weren't expecting it right now.

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LIM: This afternoon there were very few visitors here at 798 Art District in Beijing, but the financial crisis has really taken its toll on the art world here.

Local press reports say that within the past few months, 37 art galleries have closed down in this one art district alone.

MR. DUAN CHANGWU (Kiosk owner): (Foreign language spoken)

LIM: They say the rent's too high, says Duan Changwu, who owns a drink store in the district, as he points to a row of padlocked galleries. They can't sell any pictures.

Those that are open, are cutting back on their shows drastically. But not everybody's pessimistic.

Mr. PU JIE (Artist): (Through Translator) One thing is certain; the financial crisis is a good thing for Chinese contemporary art.

LIN: Artist Pu Jie lights a cigarette as he admires his towering sunflower yellow canvases. The 50-year old, whose work has sold at Sotheby's for tens of thousands of dollars, is preparing for two solo shows this year: one in Tokyo, one in Beijing. He's been painting a 60-foot-long series of panels of yellow-tinted, apple-cheeked revolutionary women, overlaid with cartoon-like, partly clad, thoroughly modern madams.

He says it is time for artists to get back to basics.

Mr. JIE: (Through Translator) Everybody was busy doing exhibitions, selling pictures, doing deals with galleries. Everybody was playing the market instead of thinking about the essence of art. Now, the economic crisis should make us think soberly about what sort of art we are making.

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LIM: Hard as it was, this market's fundamentals were shaky. Tales of dirty dealing by artists were legion; some artists bought back their own works at auction to push the prices up; others secretly offered buy one, get two free deals at auction; some even signed contracts with middlemen, paid to inflate the price of their art.

Independent curator Zhu Qi believes up to 80 percent of transactions were fake or pumped up. For some, making money began to take precedence over making art, he told me in an interview recorded late last year.

Mr. ZHU QI (Independent Curator): (Through Translator) Artists don't even have time to paint. They employ others to draw for them, then they just sign the pictures. In the late '80s, art criticized social realities, but those critical voices no longer exist. Now, the older artists are all stars and millionaires. The younger artists don't care about history and society, they just care about themselves.

LIM: Now, though, the whole market has come tumbling back to earth. But for some, Chinese art is still promising.

Yan Qing, the gallery owner who sold that picture within five minutes, is actually opening an enormous new gallery in Beijing. Ten-thousand-square-feet, it will be filled with works by those who had been the brightest stars in the firmament. We're not giving in, she told me, we're running against the tide. But the name of her first exhibition, "China's Revision," can be seen in a whole new light nowadays.

Louisa Lim, NPR News, Shanghai.

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