Noted art market hysteric, Felix Salmon, has his knickers in a twist about Artprice’s recent report that three Chinese painters have come from nowhere to overshadow Picasso & Warhol. To Salmon this is a clear sign of the end times: ”

I suspect we’re still only in its early days, but there’s no doubt that we’re in a massive Chinese-art bubble right now. And for proof, all you need to do is look at the league table of the highest-grossing artists of 2011.

1. Zhang Daqian, $506.7 million
2. Qi Bashi, $445.1 million
3. Andy Warhol, $324.8 million
4. Pablo Picasso, $311.6 million
5. Xu Beihong, $212.9 million

This is in many ways the tip of the art-market iceberg, where most deals — especially in the white-hot contemporary-art scene — are still done privately, rather than at auction. The reason no living artist is on this list is mainly that living artists have gallery representation, and galleries don’t like buying and selling at auction.

Calmer heads might find some easier explanations for what’s happening in Artprice’s tables. First, the tables mysteriously omit Gerhard Richter—a very important living artist—whose auction sales in 2011 were massive. So Artprice may have excluded living artists or have a faulty method for assembling the rankings.

Also, Chinese Contemporary artists have regularly sold works at auction—sometimes straight from the studio—for nearly a decade now. So there’s no reluctance in China to public sales that Salmon suggests.

In his lather, Felix goes further:

And the sheer levels here! Picasso has never grossed more than $362.7 million in one year; both Zhang and Qi handily beat that figure in 2011, without anything approaching Picasso’s place in the canon. And the way that these artists came out of nowhere makes Groupon’s growth seem positively sluggish.

Chinese Classical painters like Zhang, Xu and Qi are not like contemporary artists. They’re also not like Modern artists with long sales and auction histories.

Xu and Qi died in the 1950s. It is reasonable to assume that their work has not been freely traded for some time. Rising auction prices bring generate demand for and interest in an artist’s work. The art market in China is in the process of finding and distributing work that has long been out of the public eye. This past year’s sales could easily represent the perfect storm of pent-up demand, critical re-appraisal and free cash flow. We’ll only know next year. Or the year after. Or in a decade.

But before Salmon condescends to the Chinese on their taste, he should be aware that Western art markets have seen the same rise and fall in value for many worthy and unworthy artists. Changing tastes and the vicissitudes of art history are part of what the art market measures.

Art has no use value so it can never be said to be in a bubble because it is always and ever a “bubble.”

Update: Felix Salmon thinks Gerhard Richter was left off the list because his auction sales only amounted to $199m. But the Artprice posting specifically lists living artists without mentioning Richter:

In the domain of living artists, the highest-selling non-Chinese artist in the global ranking is in 6th place: Jeff KOONS generated “only” $36m versus more than $90m for Wou-ki ZAO, $57m for Fanzhi ZENG, $51m for Zeng FAN, $41m for Xiaogang ZHANG and $39m for Ruzhuo CUI.

Art Market Data Points of the Day, China Edition (Reuters)