China Now World’s Largest Art & Antiques Market, But What Does It Mean?

by Jing Daily

China Had 30% Share Of Market Based On Auction & Dealer Sales In 2011

Mainland Chinese collectors now dominate the market for Chinese traditional art and antiques

Over the past few years, we’ve watched as China has emerged as the world’s newest and fastest-growing art and auction market, with domestic auction houses like China Guardian and Beijing Poly ranking alongside Christie’s and Sotheby’s in terms of turnover, and a newly wealthy demographic buying everything from Qianlong-era jadesto blue-chip contemporary art. As the BBC reports this week, according to The European Fine Art Foundation(TEFAF), in 2011 China finally overtook the United States to become the world’s largest art and antiques market in terms of auction and dealer sales, generating US$60.8 billion and accounting for 30 percent global market share. The US dropped into second place last year with 29 percent of the market, while the UK remained in third position with 22 percent and France came in fourth with six percent.

As Dr. Clare McAndrew, who compiled the report, told the BBC, “The dominance of the Chinese market has been driven by expanding wealth, strong domestic supply and the investive drive of Chinese art buyers.” Still, as McAndrew pointed out, China taking the world’s top crown doesn’t mean a smooth ride in coming years, nor will other major art-collecting markets be without their own problems. Said McAndrew, “The Chinese market [will see problems] in how to cope with an overheated market and promote more stable, long-term growth; Europe, with how to maintain its competitiveness in the face of continued regulatory and cost burdens; and the US with the challenge of losing its supremacy in the recent past.”

Some of the major findings of the TEFAF report, as noted by ArtDaily, include:

- The Chinese art and antiques auction sector was the strongest growing market worldwide with a dramatic rise of 177% in 2010 and a further 64% in 2011.

- The driving forces behind the recovery were strong sales in the Chinese auction market and the rise of fine art sales (over decorative art).

- The Modern and Contemporary sectors combined to account for nearly 70% of the fine art market. Both continued a strong recovery in 2011, leading them to levels in excess of the boom of 2007-2008.

As McAndrew hints, the growth of the Chinese art market is not merely an issue of size and volume, but presents questions of development. Though China’s art and antiques market has surpassed the US, UK and France — which in itself reflects a major global sea-change — it’s starting from a far lower position than its Western counterparts. Searing growth, particularly in the traditional art and antiques segments, is to be expected from a brand-new market from which potential buyers were barred until a few decades ago. But the important question for China is not whether it will continue to “dominate” the global art and antiques market, but how and when the country will develop a stronger culture of art collecting and appreciation and a more mature, richer art market — gauged not by sales volume alone but also by the quantity and quality of art museums, galleries, and organizations.

Sotheby's HK sued a Chinese buyer for non-payment of Zao Wou-Ki's "10.1.68"

Peripheral issues, which run the gamut from the proliferation of counterfeits at Chinese auction houses to non-payment for multi-million-dollar lots at auction, must also be dealt with if China’s position as the world’s largest market is to also make it as established and trustworthy as its global counterparts.

While there are signs that this sort of “arts culture” is emerging, with some private museums showing a great deal of potential and more motivated individuals and collectors looking to raise the level of discourse on arts education and appreciation, clearly it will take a great deal of time for China to catch up to Europe, North America and even Japan in these regards. While the psychological impact of China’s ascendancy to the top of the world’s art and antiques rankings shouldn’t be discounted — Clare McAndrew rightfully called it “perhaps one of the most fundamental and important changes in the last 50 years” — the complexity and nuance of the market itself, and the challenges that lie ahead, can’t be understated.