BUSINESS COMPOSITION CHANGE IN THE 798 ART DISTRICT OF BEIJING, AND

REASONS BEHIND IT

A Thesis Presented to the Faculty of Architecture and Planning

COLUMBIA UNIVERSITY

In Partial Fulfillment

of the Requirements for the Degree

Master of Science in Urban Planning

by

Yifu Sun

May 2012

BUSINESS COMPOSITION CHANGE IN THE 798 ART DISTRICT OF BEIJING, AND REASONS BEHIND IT

Yifu Sun

This study begins with an analysis of the 798 Art District as it has existed since 2002, using his-torical art district maps as its primary data source. Counting and cataloging the properties on the yearly guide map has revealed that a major business composition change occurred within just this short period of time of 2007 - 2013. Since the oldest version of the historical map is that of 2007, this study’s quan-titative analysis will begin at 2007 and end at 2013. As a complementary resource, this study will con-duct archival research so as to fill in the gap between 2002 and 2007. The abovementioned approaches all seek to answer the research questions in a complex, comprehensive way. The emergence of 798 is a remarkable cultural phenomenon, changing Beijing’s inner-city fabric in a profound and probably a long-lasting way. By basing itself on data drawn from historical maps, and by extending the research and analysis to embrace scholarly documents, media coverage, and observations, the study will be able to probe the underlying causes of the gentrification process happening within 798.

I. Introduction

In 2002, local Beijing artists gradually moved into some 50-year-old decommissioned military facto-ry buildings. Within five years, right before the 2008 Olympic Games, the 798 Art District, so called by the government officials who legitimated its existence as an urban art space, emerged as a public space for both artists and local people. The original cluster of artists’ workshops has rapidly been transformed into commer-cial galleries, pop-up shops, and cafés, with that trend of course being accompanied by rising rents and strict-er government controls.

Similar to the changes that have come to the such Western urban art districts as New York City’s East Village during the 1960s, as noted by Janet L. Abu-Lughod, the great success of “Beijing 798” has impressed not only art aficionados but also city offi-cials with the way artists have gentrified this area. And yet many of the original residents of 798, mostly art-ists, have been displaced from the neighborhood as a result of the rapidly rising rents. Those displaced art-ists have sought to obtain larger spaces for lower rents, and ironically often have become the first “gentrifiers” of other neglected urban neighborhoods. For instance two other art districts, Caochangdi and Songzhuang Artists Village, both of them located farther out from the city center, have lured young artists to settle into the new community and concentrate on their creative

work. The process seems to be similar to that which Sharon Zukin noted with regard to the gentrification process on the Lower East Side of Manhattan: artists become the first gentrifiers but then, unfortunately are pushed out by the next wave of gentrifiers.

The process of art-led gentrification is indeed most often associated with the urban change that has come to New York’s Soho, and Dumbo in Brooklyn, neighborhoods over the last half century. But while 798 is frequently compared to those, merely stating that it is gentrified ignores the specificity of the Chinese ur-ban context and leads to the false conclusion that art-led urban change is the same globally and must always involve a gentrification process. There is no denying that a post-industrial space has been transformed into an arty environment that caters to wealthy consumers of art products or that 798 reveals the relevant signifi-ers of gentrification (Smith, 2002) such as increasing rents, land speculation, and formation of a new cul-tural neighborhood. It lacks, however, the typical dis-placement issue, due to its few residents (Hammnett, 1991). Even while noting the specifically Chinese cultural and political contexts, one can still assent that 798 fits the pattern of Lloyd’s “neobohemia,” whereby neigh-borhood change is not limited to the activities of the local people (Lloyd, 2006). Indeed, in 798 most of the cultural consumption is performed by tourists and visitors. Thus this particular instance of gentrification

must be considered from the standpoint of tourism and cultural activities, for those have a strong power to drive urban change and to promote area reinvestment and restructuring in an international city like Beijing.

As opposed to previous situations in the west-ern world, the origin of 798 has not created major ex-clusion issues, largely owing to the relative paucity of previous residents in the area. The owner leasing out spaces within the former factories, Sevenstar Group, provides the workers with pensions. Along with the growing popularity of 798, the previous artists started to move out from this area. Not only can they move on, as noted earlier, to “seed” other fledgling art districts, but arguably the new, pricier 798 has helped them by creating a more vibrant market for Chinese contempo-rary art.

Any attempt to fully comprehend the 798 Art District must take into consideration the sole owner-ship of it by Sevenstar Group, and the rent increases caused by a wide variety of factors: government inter-vention, rent policy changes, speculative renters, and property-value inflation, among others. What is cer-tain is that over the course of a decade, since 2002, a conflict has been raging between cultural preservation and gentrification. In addition to delving deeply into that conflict, this thesis also will place 798 within a broader context of the neoliberal flows of globaliza-tion. Most specifically, this study examines the rela-tionship between changing business composition and gentrification through its comprehensive analysis of 798 Art District. The primary research questions are the following two: How has the 798 Art District land-scape changed since 2002, and what are the underly-ing reasons for the changes? After it has completed its initial analysis of the changes in business compo-sition that have come to 798 over the last ten years, this study will offer some thoughts on the three central issues— landuse policy, government intervention, and increasing property values—that are emerging out of this art-led gentrification process happening within the Chinese cultural and political context.

II Background

Dashanzi Art District, also called the 798 Art District, is Beijing’s most popular and significant cul-tural development of recent times, with the excep-tion of the many revenue created for the 2008 Olym-

798 Art District

Caochangdi

Songzhuang Art Village

Chaoyang District

Tongzhou District

tion, slogans in praise of Mao Zedong were painted on the arched ceilings in bright red paint. Those remain, as one of the most remarkable features of today’s 798 Art District.

This factory complex fell on hard times during the period of economic and institutional reforms in the 1980s. The institutional reforms required many state-owned enterprises to become self-supporting. This means that by the early 1990s most of the fac-tories within the complex had ceased production, and more than half of the workers had been laid off. The management, reconstituted as a real-estate consortium called the Sevenstar Group, oversaw the maintenance of Industry Park and sought tenants for the abandoned buildings. During this reconstruction process, hun-dreds of workers were laid off with their salaries un-paid. The newly-formed operating company was eager to rent out the empty workshop spaces in exchange for being released from the burden of paying the workers’ pensions. In the early years of 798, artists moved into workshops, informally settling all over this area but having with management only semi-legal contracts, not officially permitted by the Beijing city govern-ment. As more artists moved in, however, this commu-nity gradually became stable, exclusive, and continu-ous, and the rent contracts became fully legal.

Back in 1984 the first contemporary artists’ community, inspired by post-revolutionary fervor and political comment promulgated via artistic media, was formed near the old Summer Palace Yuanmingyuan. The authorities dissolved this artists group in 1995, however, citing its supposedly dissident nature. The availability of low-rent workshops and living spac-es in the Dashanzi complex attracted the evicted art-ists from that and other earlier art communities. The unique Bauhaus-style architecture seems to have spurred the artists not only to work, but to exhibit their works in their rented studios. China’s socialist histori-cal—cultural language also kept inspiring the Chinese artists to develop their projects. It wasn’t long before the success of the 798 Ar District, as a cultural devel-opment in China, was attracting the attention of gov-ernment officials who decided to more fully refurbish this area. Starting in 2006, the 798 “creative cluster” began to receive vigorous support from the Beijing municipal government. Indeed it created, as part of its

plan for the 2008 Olympics, a special fund to be used strictly for the development of cultural and creative industries. As a result of the influx of visitors to the Olympics, more internationally renowned art institu-tions began to recognize the valuable, because unique-ly Chinese, cultural identity of 798, and more and more creative agencies rented space there. In that same year of 2008 the Chaoyang district finally abandoned its plan to demolish the entire 798 complex so as to trans-form it into a high-tech electronics hub, linked to the nearby commercial area of Zhongguancun. Instead, seeing the economic success of both Chinese contem-porary art areas and art districts worldwide, it decid-ed to create “China’s Soho”. Even since the advent of the 2008 Olympics, when it was officially designated as Beijing’s first cultural and creative cluster, 798 Art District has received support from both municipal- and district-level governments.

After 2008, commercial prosperity within the art district began to have a constraining effect on the production of original art. Higher rents spelled the end of the previous informal settlements, and many artists were forced to leave their studios. The new tenants were art agencies and commercial galleries, and thus 798 shifted from being creativity-oriented to consumption-oriented. The simple fact is that, neither Beijing officials nor Sevenstar executives could ignore this promotional and economic success. Soon both the operating company and the government were requir-ing a higher level of development in return for policy support. In 2009, the financial crisis suppressed even more studios and caused even more artists to move out of 798. Some artists holding cheaper leases be-came landlords, subleasing their places to gift shops or cafés. Speculation soon was rampant all around the art district, and 798 was in real danger of losing its iden-tity, just like other art districts in western countries but within a much shorter period of time. In order to keep the creative aspect of the community alive and well, Sevenstar compromised by leasing contracts to some famous institutions such as the art center knowen Ul-lens, founded in 2007 by the Belgium art collector Ul-lens. Nonetheless, quite early in 798’s history the bal-ance between “creative” and “profitable” had become a major issue, just as it has for all other newly formed art districts in other economically emerging countries.

Around 2010 a speculation boom began, as cash flew into the 798 Art District. The main corri-

dor, along 798 Road, became the most desirable place for commercial activity. Most of the major art insti-tutions and international galleries preferred to locate themselves there, so as to show the world that they had staked out a piece of the most famous battlefield of Chinese contemporary art. Nor could this trend to-ward commercialization easily be mitigated. Commer-cial galleries, restaurants, and cafés have continued to take away spaces from the original tenants. Artists’ studios and other experimental-art-work spaces have been pushed out from the main corridor to other areas of 798, or even exiled to other art districts remote from Beijing’s city center.

III. Literature Review

The gentrification process is a western concept, one that originally had the twin focuses of completed urbanization and suburbanizing expansion (Hammett, 1973; Smith 1979). The early concept of gentrifica-tion has been narrowed, however, now being limited to that rehabilitation of older residential buildings in inner-city neighborhoods which has resulted in the dis-placement of working-class occupants by richer, up-per- middle- class individuals (Glass 1964; Hammnett 1984). Even more recently, this concept has been applied both to housing renovation and to the devel-opment of vacant or cleared inner city areas (Smith, 1996; Hackworth, 2002; Davidson and Lees, 2000). The impetus transformation of this concept implies the occurrence of both renovation-led gentrification and new-built gentrification (Davidson and Lees, 2009), and this means two things: that the buildings involved are not limited to housing, and that the direct displace-ment of working-class persons may not necessarily be involved (Atikinson, 2000a).

The expansion of the gentrification concept, moving it beyond residential displacement, has itself been a relatively recent one. Given the declining man-ufacturing sector in most of the world’s metropolitan areas during the post-industrial period, it comes as no surprise that inner cities full of decommissioned fac-tories have had to deal with both the dilapidated con-dition of the infrastructure and with population loss. In order to revitalize the former manufacturing areas and to speed the gentrification process government officials often have implemented zoning changes that permit residential uses. This has been a move away from the manufacturing-only stance, formerly taken

with respect to such areas by western countries (Cur-ran, 2004). It is worth noting in this connection that at least one study has found that 798, as a former factory area with very few residents within it, has not been involved in the displacement and population loss issue (Slater, 2006). The issue of art-led gentrification has been explored extensively, and has become a theoretical battlefield between those advocating cultural develop-ment and those emphasizing social class as a key driv-er (Cole, 1987; Hammett 1991; Smith, 1986; Smith and Williams, 1986). The cultural theorists of art-led gentrification characterize artists as initiators of gen-trification, whereas other thinkers focus on the capital that follows artists into each newly revitalized area. After years of debate, it is now widely agreed that gen-trification is a joint result of both devalued urban areas and the specific consumption pattern of the gentrifiers.

In the opinion of the present writer, 798 is more likely to fit the pattern of “neobohemia” (Lloyd, 2006), whereby the local people’s activities do not constitute the sole driver of art-led gentrification. Instead, these places are economic locales in which the aesthetic value created by daily cultural performances becomes embedded in property values and local entertainment venues (Lloyd, 2006).

There can be no denying the fact that China is undergoing a tremendous urban restructuring in the post-reform era. Indeed, one might even call the whole nation a rapidly developing metropolitan area, given the incredible building boom and the obsession with modernization. And yet while massive, inner-city fo-cused redevelopment plans have been spreading all over China in recent years, this specifically transforma-tive process we are looking at here, the “neoboheman” type of gentrification, has still not been adopted on a large scale. Given the nature of the Chinese political system, it makes sense that most projects have a tight schedule associated with the five-year elective period. And since land use rights have been separated from land ownership since 1988, the renovation-led sort of gen-trification is not seen as a favorable trend when viewed from the private sector (Weinstein, 2008). While it is true that local governments have the authority to issue land-use permits lasting 50 years for commercial and 70 years for residential use, profit-seeking corporate gentrifiers prefer to demolish a structure rather than renovate it, so as to get a new full-period lease. It is all

too likely, therefore, that the process of gentrification, because too often it is happening in a wasteful, demoli-tion, over-renovation way, is causing Chinese cities to lose their cultural capital and historical value (Zhang, 2007).

Although theorists offer their various explana-tions of gentrification, all of them inevitably point to the broad range of stakeholders: builders, developers, landowners, mortgage lenders, government agencies and, residents. The government certainly could be fundamental when it comes to initiating, shaping, and directing gentrification (He, 2010), and Smith (1979) argues that the process of gentrification is initiated not by consumer preferences “but by some form of col-lective social action at the neighborhood level. The state, for example, initiated most if not all of the early schemes, and though it plays a lesser role today, is still important” (p. 545). Ultimately, however, the impres-sion most of us have of this issue, is correct, for infor-mal settlement is the chief factor actually driving the neighborhood change.

IV.Research Design

This thesis seeks to answer two questions: First, how has the business composition of the 798 Art Dis-trict changed since it was formally recognized as such in 2002? And second, what are the underlying reasons for the changes that have in fact occurred? By better understanding those reasons we will be in a position to address 798’s unique problems and to preserve its existing, and valuable art features as an art-based com-munity.

The study focuses on the Beijing 798 Art Dis-trict, which is bounded by the Jiuxianqiao Road to the west and the Jiuxianqiao East Road to the east and is not far from the airport expressway. The art district has emerged out of an industrial complex in the Chaoyang district. Built with Chinese and Soviet by East Ger-mans, the area was home to an important and secretive operation that made high-tech weaponry for the Chi-nese military. Sevenstar Group closed several factories and rented out empty factory spaces so as to generate revenues for the workers’ pensions. This study begins with an analysis of the 798 Art District as it has existed since 2002, using historical art district maps as its primary data source. Those maps have been published in Beijing 798, a study of

the 798 Art District authored by Rui Huang. Count-ing and cataloging the properties on the yearly guide map has revealed that a major business composition change occurred within just this short period of time of 2007 - 2013. This dataset of establishments corre-sponds closely to addresses, and allows the present study’s spatial analysis to demonstrate the main busi-ness corridor’s preeminent significance within the 798 territory. This spatial analysis also identifies some key players that have stayed there for the longest time and have hereby simultaneously anchored and vitalized the entire district. Since the oldest version of the historical map is that of 2007, this study’s quantitative analysis will begin at 2007 and end at 2013. So as to provide the reader with a complementary resource, this study also embraces archival research. The factor of changing business composition will be measured by assessing business closures, business openings, and changes in type of retail establishments. Because a certain num-ber of informal rent arrangements still exist, some of the cafés and shops are not listed on the official maps. Thus local and online maps also will be resourced, in order to take account of all possible establishments. The study also will document all units located within each address.

Independent Variables (2007-2013):

Gallery and Studio counts Percentage change of galleries and studiosOffice counts Percentage change of officesShops counts Percentage change of shopsRestaurant counts Percentage change of restaurantsCafe counts Percentage change of cafesArt Center counts Percentage change of art centers

Galleries and Studios:

All of the private galleries and artist studios within the 798 Art District are being run on a for-profit base. They profit by taking a proportion of all art sales. Most of them are open to the general public without charge.

Offices:

Most of the office spaces occupied in 798 are related to the creative industry. Some of the adminis-trative departments within Sevenstar Group also have been counted within this study area.

Shops: Bookstores also are counted as shops. Some shopping spaces are “mixed use,” meaning for both exhibition and shopping. For this study’s purposes all multi-functional spaces are counted as shops. Most of the shops within 798 are gift shops or clothing bou-tiques.

Restaurants:

Restaurants are bundled here with cafés, be-cause both are eateries and both provide wireless ser-vices. The restaurants tend to be relatively more ex-pensive than those found in the surrounding areas.

Cafés:

We have not included in this category estab-lishments that just serve soda and bottled coffee and that provide no indoor seating.

Art Centers: This is treated as a category distinct from gal-lery or studio. We define art center as a multifunctional community center that encourages art practice in vari-ous ways. Within 798, most of the art centers impose a mandatory charge on visitors.

Following upon its analysis of the variables, this study utilizes building typology maps from 2007 to 2013 in order to see how new structures have been added to existing buildings in 798, so as to adapt the latter to current land use regulations. This study also will identify some internationally renowned art centers and creative agencies, to show the rising position of 798 within the global art environment.

The abovementioned approaches all seek to answer the research questions in a complex, compre-hensive way. There can be no doubt that the emergence of 798 is a remarkable cultural phenomenon, changing Beijing’s inner-city fabric in a profound and proba-bly a long-lasting way. By basing itself on data drawn from historical maps, and by extending the research and analysis to embrace scholarly documents, media coverage, interviews, and observations, the study will be able to probe the underlying causes of the gentrifi-cation process happening within 798.

Research Limitations: While the above-described research method-ology has been chosen so as to allow for an analysis of the business district’s compositional change since 2002, certain limitations are inherent to the available data. The chief shortcoming lies in the establishment data for the years stretching from 2002 to 2007. As noted, historical maps did not become available to the public until 2007. In addition, the establishment data since 2007 has been transcribed directly from maps provided by the Sevenstar Group. Given these unavoidable limitations, certain parameters and con-straints are addressed up front:

V. Findings

This study’s findings, and the analyses thereof, are presented here in three primary sections. The first section presents the business change that has occurred in 798 between 2007 and 2013. Based on the data anal-ysis both quantitative and qualitative findings are pre-sented, with providing the reader with an overview of both overall business composition changes throughout the 798 Art District and along the main corridor spe-cifically. The second section reveals the underling rea-sons for the business composition change by analyz-ing the impact of the social and political factors since 2002.

Before 2007 The first art-related event held in the 798 Art District was sponsored by the China Central Academy of Fine Art in 1995. Officials there rented the 706 Fac-tory warehouse to display a large work of sculpture. The Sevenstar Group, consisting of Factories 797, 718, 798, 707, 700, 706 plus the 11th institute, was founded in 2001. From that year right up to the present

• Not all establishments are documented on the map.

• Not all establishments fall neatly into one of the six posited categories.

• The visitor-survey sample is not be big enough to have scientific significance.

• The building typology maps may not have been precisely recorded.

day some of the Sevenstar Group, factories have kept on manufacturing, including the latest technical equip-ment and military industrial electronic products. In the second section we will take a close look at which parts of the art districts are still manufacturing. In 2002 the Tokyo Gallery, operating under the name Beijing To-kyo Art Projects (B.T.A.P), took up residence within what it calls the 798 Factory. BTAP is the first interna-tional art gallery to move into the district. Around the same time a Texan, Robert Bernell, moved his inde-pendent bookstore, Timezone 8, into a former facto-ry canteen. In 2003 Lu Jie, a famous artist, set up the Long March Foundation. This includes 25,000 L Cul-tural Transmission Center and the Seasons Art Gallery, two of 798’s most remarkable institutions.

It seemed appropriate, given the boom of art galleries and artist studios, for the First Dashanzi In-ternational Art Festival to be held in the Dashanzi Art District in March 2004. The Art Festival’s organizers planned to hold a large-scale event every spring, there-by initiating a lively dialogue between citizens and contemporary culture. This plan has become a reality and arguably that the festival, which continually at-tracts attention from the media and artists worldwide, has further enhanced Beijing’s standing as a vibrant center of contemporary cultural production.

The ever growing popularity of the 798 Art District has attracted not just galleries and studios; some high-end tailoring shops and fancy restaurants also have stepped in, targeting the district’s visitors as their customers. More and more empty factory ware-houses have been occupied by a wide range of estab-lishments. And yet in the absence of any rent control, tenants’ costs have skyrocketed. In 2000-2001, rents were at 0.8 RMB per square meter per day. In 2003 they increased slightly to 1 RMB, and then doubled to 2 RMB in 2004, right after the art festival. Around 2006, some of the spaces along the main corridor shot up to 4 to 5 RMB per day. Since most of the galleries do not charge an entrance fee, they must devote their space to fashion shows or corporate events in order to sustain themselves. Because some wine-tasting clubs and fashion studios began to push out the art institu-tions, which could not afford to maintain themselves within 798. Sevenstar Group was compelled to take action to keep the trend from getting worse. Also, the galleries sought new ways to finance themselves.

After 2007

Commercialization, brought about in part via the vast media exposure that has been given to the 798 Art District as part of the coverage of the Olympics and of the booming Chinese contemporary art market, has turned it to a great extent from a place of creative ar-tistic production to a showcase and marketplace. It has experienced a short and intensive life-cycle, morphing from a grassroot’s art community into a world-famous tourist destination in just two or three years. Around 2007 a few works done by Chinese artists working in 798 and other art communities were sold for record prices at overseas auctions, and since then contem-porary Chinese art has become a booming market for speculation. Some investors began to invest in the art trading business itself, and thus 798 quickly became a place not just for exhibitions to be staged but also for all interested parties to network. Investors were not looking for a merely short-term return, and as they saw it, renting a space in 798 could promote their brand even while gaining them goodwill of the community for being the creators of a de facto community center.

Little wonder, then, that back in 2010 the rents began to rise from 5 to 8 RMB per day. As the dataset presented will show, in a certain sense 798 has never been the same since 2007, for it has chief-ly been tourism-related enterprises that has been able to pay the higher rents. Although after the 2008 financial crisis, the rent went down to 5 or even 3 RMB, today we still see along the main corridor, with its heavy pedestrian traffic, gift shops and ca-fes standing at the center of the 798 Art District.

In essence commercial rent control functions similarly to residential rent control: it limits the per-centage increase in a tenant’s rent during his or her ten-ure, while allowing building owners to impose more significant rent-increases when a new tenant signs a lease. This only works, however, when speculation is not rampant within an area. In 798, despite what seems to be the sole ownership of Sevenstar, some broker com-panies held a considerable number of leases in the early years before the rents began to escalate and they contin-ue to hold them today. Sevenstar can not easily oversee the rental arrangement worked out between brokers and secondary tenants. Thus without an integrated rent control approach, 798’s character as an art-making or at least an art-focused area will not easily be preserved.

In the next section, quantitative data will be used to reveal the business composition change that has occurred in the district between 2007 and 2013. The breakdown analysis with-in each category also will be illustrated there.

FIGURE 2Guide map of the 798 Art District

Source: www.798art.org

The map seen in Fig. 2 delineates the study area. The main corridor is established along the 798 Road, which also provides the main entrance way to the district. Most of its key establishments are consol-idated along the main corridor, which has been high-lighted in red. The business establishments situated in zone D and E are those that have seen the biggest retail changes since 2007. Properties presently rented out are depicted as dark gray, those presently not rented out as light gray. All of them are operated by Sevenstar Group.

Granted, the area’s establishments have not been documented completely, owing to the shortcoming of the primary dataset: the lack of data as to business open-ings and closures before 2007. Table 1 and 2, which as-sess respectively the different types of establishments found in 798 as a whole and along the main corridor specifically, are based on a not inconsiderable database.

D

E

Table 1 vividly presents some of the findings about our study area as it has existed since 2007. One notes, first and most basically, that the total number of establishments has increased by 20.6 percent over the six-year period from 2007 -2013. Second, we see that galleries and studios predominantly make up the art district. And yet while other types of business have been mixed in more proportionately over the six years, the gallery/studio percentage went down from 67 to 59 percent. The number of galleries and studios slightly decreased in 2009, then increased by seven percent over the year of 2007. Third and perhaps most remarkably, Table 1 tells us that the number of shops increased from 11 to 39, which is to say more than tripled within this short period of time. In the next section we will see which specif-ic types of shops increased. It also is interesting to note how cafés, always a good indicator of a gentri-fied area, have increased dramatically. This increase has gone hand-in-hand with an upsurge in visitors.

Reflecting these quite dramatic changes in the 798 Art District, the local newspaper Guangming Dai-ly, on September 5, 2010, reported that the 798 Art District had evolved into the third most visited destina-tion in Beijing, after the Forbidden City and the Great Wall. From 2007 to 2013, the district’s shops, restau-rants, and cafés, which primarily serve tourists, were its major revenue generating vehicles. The fast-paced growth in these three categories Table 1 shows us that all of them have increased by between 100 percent and 200 percent over this six-year period must please, but also somewhat concerns, the Sevenstar Group. On the one hand, as a real estate management company, it is doing a fair job of preserving the character and spirit of the district, even while infusing it with businesses that caters to tourists. On the other hand if the rents keep growing at their present speed, however, this could turn out to be a case of killing the goose that laid the golden egg, for the more profitable secondary business-es, may push out the primary, art-related institutions.

When we look at the changes that have hap-pened in 798, we note that while the galleries and studios experienced the really significant growth be-tween 2007 and 2013, the real boom occurred in the services sectors, which are tourist oriented. While this result chiefly reflect the district providing an appropri-ate supply of sources to meet the visitors’ demands. The rental policy also has played an important role in

2007 2009 2011 2013 Percentage Change from 2007 to 2013Gallery & Studio 106 99 103 96 -9.40%

Office 28 31 19 18 -35.70%Shop 9 8 22 34 277.80%

Art Center 6 5 6 8 33.30%Restaurant 7 6 7 7 0.00%

Café 3 2 9 12 300.00%Total 159 151 166 175

TABLE 2 Establishment Counts along Main Corridor between 2007 and 2013

2007 2009 2011 2013 Percentage Change from 2007 to 2013Gallery & Studio 153 135 144 164 7.2%

Office 44 40 31 30 -31.8%Shops 11 19 22 39 254.5%

Art Center 9 9 10 10 11.1%restaurant 7 14 17 18 157.1%

café 4 5 12 14 250.0%Total 228 222 236 275 20.6%

TABLE 1 Establishment Types in the 798 Art District between 2007 and 2013

shaping the business landscape. In keeping with busi-ness clustering theories, there is a statistically signif-icant relationship between overall level of business vitality and the likelihood of a new business open-ing. In other words, within 798, the growth in shops, restaurants, and cafés has quite certainly attracted other similar businesses to the district. Nor is there any reason to doubt, given the district’s continually solid visitor base, that the number of those three es-tablishment types will keep increasing in the future.

As shown in Table 2, the changes in busi-ness composition along the main corridor fit the pat-tern seen for our entire study area. Between 2007 and 2013 the number of galleries and studios decreased by 9.4 percent, while the number of the shops almost tripled (a 277.8-percent increase). Some of the new shops are being run by owners of galleries and stu-dios who have decided to expand their businesses, selling some art-related merchandise in order to in-crease their income. Restaurants, however, have not increased at all along the main corridor and lag far be-

Source: Historical maps from 798 management office

hind the tripled growth of the number of cafés. Most of 798’s restaurants are located off the main corridor, given that the build-outs of structure cannot easily meet the legal requirements for restaurant operation.

By analyzing those findings with respect to the business landscape of the main corridor and the entire study area, we have concluded that 798’s retail gentri-fication is concentrated mainly along the designated main corridor. Its location means that it absorbs most of the pedestrians and the motor traffic. Thanks to a the visitors survey conducted by a local university in 2012, first-time visitors make up 75.3 percent of all visitors. Given their inevitable time constraints the businesses along the 798 Road are the ones they are most likely to encounter. Thus the business composition pattern shown in Table 2 is consistent with visitor preference to spend most of their time within the 798 Art District ex-ploring boutiques, independent bookstores, and cafés.

The debate about the district’s ongoing changes in the retail sector and the implications of those for the

neighborhood’s character has focused on primarily the dichotomy between independent and chain retailers. It is rather extraordinary that even given the boom in 798’s all of its businesses are being run independently. Based on our preliminary observations of the business profile, all businesses documented within the main cor-ridor are independent, not part of any chain. Looking strictly at major cafés, we noted that since 2007 10 cafés have come into the corridor. None of them is owned by a chain coffee company such as Starbucks or Costa. A fact that seems even more remarkable when one real-izes that in Beijing those two companies have 113 and 74 branches respectively. As Rachel Meltzer and Jenny Schuetz found in their study of various retail establish-ments in New York City, a gentrifying neighborhood usually is associated with a significant increase in the number of independent businesses. In a relatively iso-lated area such as 798 and given that Sevenstar Group could easily control which types of establishments are permitted to move in, the business displacements have occurred in a more consolidated fashion than one would expect to see in other gentrified neighborhoods.

In 2007, five out of nine shops that opened along the main corridor had no pervious relation to the district. As mentioned previously, Robert Bernell moved the independent bookstore Timezone 8 from the other side of city. Tattoo parclors, clothing boutiques, and furniture store comprised the rest part of the retail landscape in the center of 798. When we looked closely at the owners of the retails establishments at that time, we found out that most of them had a strong relation-ship with the artists of 798. Still, most of these own-ers were taking their first stab at being entrepreneurs. According to Zukin’s establishment classification methodology, new entrepreneurial boutiques typically differ from traditional local retail establishments with respect to ownership, product quality, atmosphere, and style of business promotion. In the present case where, owing to the newness of the district, “traditional” means little, we are not surprised to see that virtually all of the recent additions to the main corridor area are gift shops and art-related boutiques, their owners have stepped increasingly in order to grasping disposable dollars from tourists. The upsurge in retail establish-ments along the main corridor has to a certain extent been spread over the entire art district. What matters most, however, is a fact that Andrew Deener shares in his study of the main corridor’s impact on the district: that the new residents by changing the character of the

corridor’s retail offerings, are taking “symbolic own-ership” of the street’s identity. From 2007 to 2013, as the number of shops along the main corridor tripled, galleries and studios still comprised most of the busi-ness landscape. We have found, however, that gentri-fication in 798 is not so much about the number as the nature, of the changes occurring within each category.

Back in 2007, three out of the nine shops along the main corridor were independent bookstores spe-cializing in art and design books. As of 2013 there remained only four bookstores within the entire art district. Most of the recent addition have been fashion studios and handcrafted clothing stores. While shops still account for less than 20 percent of the establish-ments found on the main corridor, all of the non-art-re-lated establishments have jointly redefined this main corridor’s character. As shown in Table 2, galleries and studios as the “original residents” in 798 have decreased by 10 percent over the six-year period. This means not only that 798 is losing the physical appearance of an art district, but that relation between art-making and retail selling is in a state of flux. As noted previously, Sevenstar Group as overseen of the art district in theo-ry could closely monitor the type of business establish-ments in permits. In fact, however, it is no easy matter to intervene in the running of a business much less of numerous businesses. Under the pressure imposed by increasing rent, the managers of some galleries and art spaces have started to rent out their spaces just to sus-tain themselves. The danger, of course, in long term, the gentrification process, largely meaning the boom in retail establishments catering to tourists, will end up excluding the original art institutions from the 798 Art District and thereby deprive it of its raison d’etre.

D

E

798 Road

Property not rent

Property rented

D

E

798 Road

Property not rent

Property rented

FIGURE 3Figure Ground of Main Corridor in 2007

FIGURE 4Figure Ground of Main Corridor in 2013

By comparing Fig. 3 and 4, the figure ground along 798 Road, in 2007 and in 2013 one can see how the building typology has also changed over the six-year period. Numbers of buildings along with the corridor have been listed in the selective preservation programs, which came into existence in 2000 in con-junction with the event described below. With respect to besides the pre-existing building groups deem to be historically significant roads pre-existing scenery and human ecology are all considered environmental and cultural components of the 798’s. In 2000, the Bei-jing Planning Commission designated the Dashanzi Art District as a historical district. It is hoped that this context, the figure ground has been presented above has been strongly associated with the preservation per-spective. By examining the figure ground plus making some personal observations, we have found that the transition of the pre-existing structures from industrial to retail has created some new issues even while fos-tering the new ideas of adaptive use. The new additions along the main corridor are for the most part tempo-rary and interim structures. Since it is not always pos-sible to find a long-term reuse that is both financially viable and appropriate to the heritage context, setting up temporary uses can be an important way to main-tain sites in use, and to avoid demolition by neglect.

Building structures, when considered along with the safety and evacuation problems, we have found that the type of these pre-existings has a strong collation with the type of establish-ments. As shown in the Zone E of the map depict-ed in Fig. 3, The Ullens Art Center has taken up

most of the space since 2006.

Taking advantage of the high ceiling heights and big windows characteristic of the district, Ullens utilizes the interior space of the old factories to stage regularly large scale exhibitions. Only a few factories, however, have been rented out as one contract to the capable renters financially. We have seen most of the factories divided up into smaller spaces for rent, and believe this lack of sufficiently roomy spaces explains quite a bit of the slow growth of art centers along the main corridor.

From the observation of the two figure grounds in 2007 and 2013 as depicted in the two figures, reveals clearly that more storefront small temporary structures have been developed along the 798 Road. No large-scale development has been permitted by the planning commissions owing to the preservation clause in the constitution. The additions are mostly shops and com-mercial galleries take up less space and one able to pay a higher average rent. As previously mentioned, the rents within Zone D and E are the highest as compare to the rest of 798. In order to generate more revenue, more temporary buildings in Zone D and E as permit-ted by the building codes. The more crowded building groups comprised chiefly of retail establishments, are supposed to devote some of their space to outdoor art exhibitions. As shown by the dark gray areas, more properties were being rented out as of 2013. However, it seems that in absence of a subsidy system such as the tax exemptions in the States, there are going to fewer and fewer art-making institutions could locate in this area.

A local newspaper has run several articles on the changes in 798’s business composition of 798. On Au-gust 18, 2013, Qi Zhu, an art critic, wrote this: “While art institutions still predominate in 798, the negative fact is that most galleries and art institutions have already lost their expertise, very few being truly professional. The rental policy is centered strictly around the highest bid. Thus market rule has essentially altered the invest-ment environment from one based strictly on trading art works trade to one characterized by a combination of art trading, networking and promoting brand value.”

Along with the surging appreciation of Chi-nese contemporary art in the global art market, in-vesting in art pieces has become a rational option for the members of China’s new upper class. Thus it should come as no surprise that ownership of the galleries in 798 has shifted from artists to investors.

Sevenstar Group made an attempt to adjust the structural composition within 798 by leasing certain spaces at a discount rate. Although that tactic did help to keeping art centers such as Ullens in the district, the smaller agencies running the most creative and exper-imental spaces were unable to leverage an affordable price and have been pushed out. Even those few that have just barely managed to hang on within 798 have been hard pressed to mount any exhibitions, owing to a lack of resources. Although the number of visitors to the dis-trict has remained high and even increased as shown in Table 3, we are taking chiefly about tourists who do not really care about the works presents in the exhibitions.

VI. Implications

Rather than conforming to the traditional pat-tern of art-led gentrification, whereby a localized de-mand for art is established and transforms a declin-ing urban core into a trendy residential neighborhood (Cole, 1987; Ley 2003), 798 follows the example of Lloyd’s (2006) ‘Neobohemia’, whereby neighborhood change is promoted by more than just the activities of local people. Such art district characterized by policy support and inherently isolated from the surrounding area, increasingly are new as cultural properties by emerging economics such as China. As we have been seen, during this gentrification process, the artists are the initiators in the first wave to embed the new aes-thetic value into the districts. Even though we consider them the ‘original residents’ of the neighborhood, their

social coherence with it is looser than that of original residents. We also have seen that this new type of art-led gentrification shown by the art-making phase of 798 tends to last less long than did the similar process in the other art districts like Soho in New York City. Quite simply, and as revealed by this study’s specif-ic findings, the flux of investors of such as, plus the ensuring raised rent rapidly swept these artist studios out. Then commercial studios and stylish cafés attract-ed more cool-hunters into explore 798. Social media exposures have made 798 even more famous among both foreigners and locals. During the four year pe-riod stretching from 2007 to 2011, the decline of gal-leries and studios has been noticed, as many artists have moved out their workshops to other art districts farther out. Equally noteworthy has been the influx of boutiques with their owners essentially becoming the second wave of gentrifiers within this unique gen-trification process. The overall process has followed process has followed the progression shown in Fig. 5.FIGURE 5 The gentrification process in the 798 Art District, from 2002 to 2013

The success of 798 Art District also should be considered as a case representative of wisely utilizing the industrial heritage site’s dating back to China’s in-dustrial period. The aesthetic of an industrial place is readily compatible with arts use, with a buildings fab-ric being retained a patina added to it over a decade in the case of 798. Having a coherent and effective plan-ning policy is vital to making adaptive reuse a viable option. For instance, the Beijing Planning Commis-sion included an industrial heritage policy within its planning scheme. The zoning changes that have come to 798 also have had a significant impact on the viably adaptive use of this industrial heritage site. Convert-ing industrial buildings into creative spaces provides affordable studio spaces for artists and craftspeople, while keeping the empty factory structures in use. The

additional temporary structures along the 798 road have also be served to ensure the long-term viability of the 798 Art District. Although reuses have a built-in ‘sunset’ clause, which enables the building to be re-turned to an earlier state or reconsidered at a later time,

Although people continue to liken 798 to SoHo, this study’s findings vividly present the many differences between the two places. As an urban space designated by the Beijing government, 798 has been expressly restructured around cultural consumption by both tourists and local people. Although the entire art district was transformed from a former factory com-plex and is till largely operated by the same real estate company. The business establishments have grown more consolidated along the main corridor and adja-cent area has not been strongly affected. Although the 798 creating process is clearly related to gentrification, it is not a classic case, owing to its differing gentrifiers, its non-inner-city residential site, and the lack of dis-placement. Spurred on by both the 2008 Olympics and the boom in Chinese contemporary art within the glob-al market, the success of 798 has gone hand in hand with the rise of culture within China and urban policy. Beginning as an informal settlement of the artists in 2002, 798 has needed only taken one decade to trans-form itself from an artists community into a world-class destination. The broadest lesson taught by the 798 Art District is that to a surprising extent Beijing has under-gone an economy based on production to one based on cultural consumption. In other words, it emergence has been not only a result of, but also an influence upon a cultural shift taking place within Chinese society.

VII. Conclusion While this study has focused on the business composition change in 798, the issues presented this rapidly changing district have not followed the same gentrified trajectory seen in other art-led gentrifica-tion. The artists studios and spaces are considered the original residents these then having been gentrified by two waves of gentrifiers. Although it is reflective of global images of post-industrial artists’ enclaves, 798 raises questions, as to how such images arise and how they are exploited, in the local Chinese context. The artists’ connection to money and political influence reveal that a fascinating pluralisation of power has followed the opening up of China’s economy.

Acknowledgements I would like to thank Stacey Sutton, Jeffrey Johnson, Jin Qiu, Yue Sun, Xin Li, and Peter Robert for their patience, assistance, input and guidance in this research.

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