Market China

China’s billion-dollar domestic art market

International galleries hope to broaden collectors’ taste in art

Traditional Chinese art tempts collectors at Tefaf Maastricht this year

Although China is one of the leading art markets in the world, collecting there is still largely domestic. In one of the most in-depth reports conducted recently, the European Fine Art Foundation (Tefaf) Art Market Report 2013, the economist Clare McAndrew wrote that China’s economic growth “combined with a rich cultural heritage of art and antiques has produced a huge domestic market”. Chinese collectors are mainly interested in buying Chinese calligraphy and paintings and contemporary Chinese art, the report confirmed.

But the arrival of Art Basel Hong Kong and a growing number of museums and commercial galleries showing international art on the mainland and in Hong Kong will change this—or so many believe. “The multipolar and diverse trends of the global art market will extend,” says Magnus Renfrew, the director Asia of Art Basel. “Metropolitan centres, such as New York, London and Beijing, have become international art hubs. In particular, Beijing’s [international] status is supported by China’s powerful domestic auction market,” he says.

Current Chinese taste

A report produced by Art Market Monitor of Artron (AMMA) and Artprice, The Art Market in 2012: a Dialogue Between East and West, shows that Chinese buyers favour fine Chinese calligraphy and painting (traditional, Modern and contemporary). Indeed, Chinese calligraphy accounted for 88% of Chinese fine art auction sales in China last year—and just over half of the country’s $6.9bn total of auction sales, which includes decorative art, jewellery and other luxury items.

Traditional calligraphy and painting are considered “safe havens” in China, because of their rarity. The two leading Chinese auction houses, China Guardian and Poly International, promoted fine Chinese calligraphy and painting when they entered the Hong Kong market in 2012. In Hong Kong’s spring auctions this year, fine Chinese calligraphy and painting sales at Sotheby’s, China Guardian and Poly International were all huge successes: 97% of the lots were sold in Sotheby’s Chinese calligraphy and painting auction, and Poly International and China Guardian sold 80% of their lots. Meanwhile, contemporary ink, which draws on traditional materials and techniques, has become a Chinese art market hot spot.

International contemporary

Although there are collectors across Asia of international (or Western)-style contemporary art, many of whom will be in Hong Kong for Art Basel Hong Kong, “experts in the trade estimate that there are currently only around 30 large collectors of Western art from mainland China”, Clare McAndrew writes.

Galerie Perrotin opened its Hong Kong branch in May 2012 and mainly promotes Western contemporary art. It has exhibited works by several Western contemporary artists in the past year. Alice Lung, a director of Galerie Perrotin Hong Kong (1C37), says the gallery’s clientele is mainly Western, with one or two collectors from mainland China.

International art dealers are in Hong Kong this week partly because they are positive about Chinese collectors’ interest in Western art in the future—as is Eric Chang, the international director of Asian 20th- century and contemporary art at Christie’s Hong Kong. He says that, as they travel overseas increasingly frequently, high-end Chinese collectors’ tastes are gradually changing. As a result, he argues, the Chinese art market will eventually become international.

Confidence

So far, reports from this year’s Tefaf Maastricht suggest that Chinese collectors hardly showed any interest in non-Chinese historic art and antiques at the fair. But Ben Janssens, the chairman of Tefaf, is confident about the growth of the market for European art in China. Tefaf and Sotheby’s are in talks to develop Tefaf Beijing for 2014. He says that time and education are needed before there will be widespread collecting of Western art and antiques.

There has been a deceleration in China’s rate of economic growth (the rise in GDP slowed from 9.2% in 2011 to 7.2% in 2012), but in her presentation about China’s art market at Tefaf Maastricht in March, McAndrew said that 75% of the country’s high-net-worth individuals, who have at least $1m in investable assets, expect to be wealthier in five years’ time. This confidence will inevitably influence the Chinese art market, as high-net-worth individuals tend to buy luxury goods and art.

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