In this week’s issue, the influential British magazine The Economist says that ‘China’s once bustling art trade is flagging’. Down at The Economist, they like their puns: the article is headed up ‘Blue period’.
Down but not out . . . Chinese auction buyers in Paris
Although worldwide art sales last year reached a record $65 billion (the trackable ones, that is) according to the European Fine Art Foundation. However, while Britain and the USA boom, auction sales in mainland China amounted to $5.5 billion, 40% below their 2011 peak, according to the China Association of Auctioneers and online Artnet. Global sales last year of Chinese art and antiques $7.9 billion, down 31% from three years earlier. Russian and Brazilian art is also well down in sales performance.
However, the Chinese art market has been notoriously unpredictable. In 2005, the China art market accounted for under 5% of global sales. By 2011, its share had rocketed to 30%! Then, in 2012, the market fell back by a staggering 43% – but rebounded in 2013! Now it can be seen to have fallen back again last year. Last year, it is reckoned that more than half of auction lots exposed in Chinese sales were unsold. As a result, many potential vendors are not exposing items at auction so quality is poor at auction and that further depresses demand.
PolyCulture is the largest auctioneer in China and although the Chinese government and military effectively control it, the shares on the market have fallen by around one half since last year’s public offering. Last year, Poly expanded its own stock of art by 82% in a bid to shore up the market. Despite that, revenue slumped by 27% in the first six months of this year.
The most worrying statistic to come out of China is that last year buyers failed to pay for 63% of works ‘sold’ for over $1.5m. Those of us working in the market in the UK are also aware, from a vendor’s point of view, of works languishing in the warehouses of auctioneers, unclaimed, unloved . . . and unpaid.
Chineseart.co.uk opinion What is going on then? The clampdown by President Xi Jinping on gifts and corruption has indubitably affected the art market in China. As China sinks deeper into a potential economic mire, the brakes are going to have to come off. It won’t be sudden but gradual as it cannot appear to represent a policy U-turn. Growth is also weakened in China but, again, corrective action will be taken by the Chinese leadership. If they lose grip on an economy over which they have pretty much total control there will be a severe danger of unrest within China. The market may be down this year (and last year) but it can equally well rebound next year as new buyers emerge in China’s burgeoning middle class. There is still vast spending power in China.