Parallel Between China’s Art Market And The Broader Economy
The New York Times published an interesting story yesterday about the connection between buyer trends and scarcity in recent art auctions. Technically, scarcity has always played a part in buyers’ habits, obviously, as dead artists usually sell for more than those with a pulse. But the reporter remarked that scarcity is being pushed along quite rapidly in some markets, more than in others. At a recent sale of antiquities, the popularity of Chinese works reflects the rising belief among many collectors that — from Shang Dynasty pottery to important historical contemporary artists from 1989-1999 — the Chinese market exhibits all of the hallmarks of a solid global art market: Scarcity (driven by increased domestic buying and slower output by living artists), outpacing inflation, and quality (established by more high profile acqusitions). So as the market for antiquities continues to roll along, the increased attention to contemporary pieces should ultimately benefit the whole Chinese art market.
In the New York Times article, the reporter uses the growing trend of fevered bidding from domestic Chinese buyers to exemplify the growing heat simmering beneath the market for Chinese works of art — though prices are lower than a year or two ago, it will be critical for those interested in Chinese art to watch the buying and bidding trends of Chinese collectors:
The most telling indicator of the very rosy outlook for the Chinese art market was the massive participation of dealers from mainland China and Hong Kong. They sent a polychrome vase of the Yongzheng period (1723-1735) of exceptional quality skyrocketing to $1.81 million, 10 times the estimate. True, that had an irresistible virtue in Chinese eyes. The vessel was clearly made as a match to a virtually identical piece…now in the Palace Museum in Beijing, which gave it the aura of imperial provenance.
Comparing the fast-paced action of bidders in the Chinese art categories in comparison to more subdued buying in Islamic art in the same auction, the reporter concludes
If this goes on, the art of China will become the only serious game in town, establishing an eerie parallel between the art market and the broader economy.
This statement falls in line with what I’ve projected before, as I have a feeling that with upticks in the Chinese economy we will see fitting upticks in the price of Chinese art. The two seem to parallel each other, and as China looks to be one of the major drivers of world economic growth as the economic crisis grinds on, it appears that Chinese art — which, much like the antiquities sale described in the New York Times, will increasingly be purchased by Hong Kong and mainland buyers as well as foreign buyers — will be a good buy in the near term and appreciate in value in the long term.
The hinge here is quality and scarcity, the two major factors in most valuable art. Quality is subjective, but typically good quality art and artists are judged by whether they are taken seriously by the art establishment or if they are just flash-in-the-pan fads hung in fashionable galleries. So in the quality category, we can put a “check” for contemporary Chinese art – since, as discussed before, high-profile acquisitions have continued to validate the country’s artists. Scarcity, too, is increasing in China as high-profile artists like Yue Minjun and Zhang Xiaogang create fewer pieces per year, and domestic buyers become more interested in their country’s cultural creations and China establishes new generations of collectors. Definitely plenty to watch for in this interesting market.