It has been a year since the US-China Trade War started and little progress has been made since the deal fell apart. As the tension continues to increase, more uncertainties arise over the economic prospect and business environment for foreign companies in China. One example is Pace Gallery’s recent decision to close its Beijing branch after 10 years of operation.

Situated at the heart of the 798 Art District in Beijing, Pace’s 22,000-square-foot outpost opened in 2008, making it the first U.S contemporary art gallery in mainland China. The gallery had previously displayed works by both Chinese and Western artists, representing Chinese artists like Zhang Xiaogang, Qiu Xiaofei, Yue Minjun, as well as Western art giants such as Willem de Kooning and Jean Dubuffet.

Pace Gallery closes its Beijing branch after 10 years

An artwork by Yue Minjun. Pace Gallery

An artwork by Dubuffet. Pace Gallery

“It’s impossible to do business in mainland China right now and it has been for awhile,” Arne Glimcher, Pace’s founder told ArtNews. “The last straw is Trump’s duty on Chinese artists coming into this country and Xi Jinping’s duty on Americans coming into China.”

Arne Glimcher, Founder of Pace Gallery

Glimcher said that people are afraid to conspicuously show their wealth since Xi has come to power. He also cited the 38-percent luxury tax on purchases of works of art on the mainland as a key obstacle to commercial success. For now, he will maintain an office and a viewing space in Beijing.

Pace Gallery, currently running two galleries in Hong Kong, may consider expanding its footprint there since the mainland Chinese are not buying in China. Glimcher added, “If they are, they [are] buying for their apartments in other places in the world and they come to Hong Kong anyway.”