A painter works on an original work at Xiamen Union Arts Co Ltd, an oil-painting producer in Xiamen, East China's Fujian province. An increasingly large number of Chinese oil-painting producers are making a greater effort on original works to make them more valuable. [Photo/China Daily]

It's like any small city in China. Motorcycles ride on narrow streets with small houses on both sides. A new railway station has recently appeared in a neighborhood with shabby buildings scattered around.

In Putian, Fujian province, it's difficult for an outsider to detect clues of its connection to Western culture from its appearance as a gradually urbanized small city.

But a decorative painting hanging in a popular restaurant in New York may have been produced in a house in Putian.

The city is one of the biggest producers of commercial oil paintings, or decorative paintings, in China, together with Xiamen in the same province, and Shenzhen, in Guangdong province.

About 70 percent of the commercial oil paintings in the United States and Europe came from China in 2005, according to industry estimates.

Norwegian art dealer Kjell Pettersen comes to China twice a year, and goes home every time with 150 to 200 oil paintings he has bought in Dafen village, an area where commercial paintings are made and traded in Shenzhen. During his last visit in June, he spent 2,700 yuan ($423.9) at a gallery in the village.

"You can find good decorations, and also very good paintings inside," he said, pointing to stacks of completed canvasses in the gallery.

There are a lot of people who paint in Europe, "but in my country, if you are an art student, you get a salary from the government, so you don't have to sell, and that's why the prices are so high," he said. The canvas alone for a 65 yuan painting in Dafen would cost 300 krone ($51) in Norway, he added.

"Business is business," he said. "You have to know about prices when you are a dealer."

Foreign dealers like him have shored up China's commercial painting exports over the past 20 years. It is similar to any other manufacturing sector in China, with its low costs and sufficient labor pool.

The total value of Dafen's oil painting industry reached 3.9 billion yuan last year, almost 30 times the figure in 2004, according to Dafen village administrative office. About half went to overseas customers in 2011, and the proportion was even higher in previous years

Emerging markets

Although strong demand from the US and Europe helped China turn a personal craft into a mass production industry in the past decades, it now faces a challenge from shrinking orders from developed markets.

The drop in orders has also led to intensifying price wars, as in many other manufacturing sectors where lowering prices is a common practice to win orders, especially for weaker players.

All these factors have combined to squeeze companies' profit margins.

For dealers, it fell from a peak of around 40 percent to around 10 percent, Lin said.