The Chinese Art Market

China Daily has a good article on the strength of the Chinese art market.  The article is very bullish, stating that outside of the US, China now has the most billionaires, and many are looking for hedges against inflation and seeking to invest in art. In my Journal of Advanced Appraisal Studies article on Price Anomalies I mentioned the combination of the economy, high net worth individuals and art investments, and how when combined, price anomalies may occur. So there could be more eye opening prices as those with near unlimited funds seek the best quality artwork.

The Chinese market is so strong ancillary services such as financing and art investment groups are starting to operate, understanding the desire to collect and invest in art and purchase luxury goods. The question is, as the growth in this market has been so fast and the desire to collect so strong, is the Chinese art market secure for the long term or is it just a bubble?  Time will tell.

The article states

While people are increasingly concerned that severe inflation might develop after the country adopted a loose monetary policy last year in the fight against the financial crisis, the most wealthy are thinking about ways to maintain the value of their assets. Over the past few months, the price of risk-averse products including gold, jewelry, artwork and other luxury goods rose steadily.

Furthermore, analysts said that with hot money - betting on the appreciation of the yuan - continuing to flow in and finding channels for investment, the country's art market is likely to embrace a thriving season this year.

"Wealthy Chinese are restructuring their investment portfolio this year. If there are refined and rare works in the market, a new round of record breaking auction prices is likely to emerge," Zhang Shuo, a spokesman for Shanghai Contemporary Art Exhibition, wrote in an article.

Another noticeable phenomenon in the art investment market is the involvement of financial institutions. Financial services including artwork options, artwork mortgage loans and artwork entrusted investment were launched to accelerate the development of China's art market.

To read the full article, click HERE.