5 Predictions for the 2013 Chinese Art Market

Jing Daily has a post with 5 predictions for the Chinese art market in 2013.  As China and the Chinese art market have become so popular and important as both consumers/collectors of art and have a large impact on auction house productivity.  The 5 predictions pretty much follows form of moving from an emerging market to a more mature market.

The 5 predictions from Jing Dialy are

1. More Confidence: In the year ahead, we expect the environment in the Chinese art world to improve as collector confidence rises amid a better economic climate and, potentially, a compromise in Beijing over art import taxes. In the run-up to the expected construction of Beijing’s freeport this year, Beijing may look to improve the broader system for encouraging collectors to bring items purchased at overseas auctions to China, a move that would be welcomed by Chinese collectors particularly operating in the modern Chinese art and Chinese antiquities segments. Often, auctions in the latter category in London, New York and Hong Kong are a regular destination for mainland Chinese buyers, as top-quality pieces are often found overseas. Additionally, it’s becoming clear at auctions worldwide that serious Chinese collectors understand the historical and cultural importance of Chinese art and antiques, rather than simply their economic value, and are buying for a myriad of personal and financial reasons.

2. Market Maturation: Less frenzied auction bidding is also a sign of maturation in the Chinese art market, with several Western auction houses now requiring deposits to deter non-payment by bidders. While this perhaps hits the bottom line in the short-term, shaking speculators and less serious bidders out of the market will likely benefit the Chinese art auction market over the long-term, preventing unsustainable price spikes for lower-quality works or less-established artists.

3. Motivations Intact: Additionally, we expect to see an uptick this year in the Chinese art market (particularly in the contemporary segment), because the fundamental motivators for wealthy Chinese art collectors remain in place — a paucity of options for diversifying assets, a strengthening yuan, “face” and prestige among peers, demand for portable assets, and threats of inflation among them. As Gulf News noted this week, observers expect the ultra-wealthy, particularly in emerging economies, to get more involved in the auction market this year. According to the news site, “art as a financial instrument is likely to play a role in the race to hedge possible rampant inflation that could result from ongoing hyper-accommodative monetary policy. Investors are also comforted by low correlation with other asset classes and the ability to park their money in real assets.”

With blue-chip art often referred to as a remarkably consistent asset class on a historical level, expect to see Chinese demand remain strong and pragmatic for the best and most valuable artwork and antiques.

4. Fewer Speculators, More Serious Collectors: Echoing, in many ways, that same sentiment, Chinese art collector Zhu Shaoliang recently said that any talk of a significant dropoff in the Chinese art market this year is highly unlikely, as major buyers have not let up in their pursuit of top-quality artwork. Said Zhu, “Their collecting activity is not influenced by economic circumstance; if good objects emerge, they will definitely be interested. The reason there have been some mid-to-low grade objects at auction is because of the strong, destructive force produced by investors and speculators.”
If — as we expect — the Chinese art market is populated more by serious collectors this year, intent on holding onto quality works to sidestep inflation, give face, populate private museums and diversify assets, 2013 could be a better year all around for auction houses in mainland China, Hong Kong, and worldwide.

5. Top Works & Artists Increasingly Scarce, Bargains Still To Be Had: In addition to more cautious bidding by newer Chinese collectors, one of the factors leading to lower overall buyer volumes last year — according to major auction houses like Sotheby’s and Christie’s — was the difficulty in procuring top works by blue-chip artists. For certain artists in segments like modern, classical and contemporary Chinese art, the number of available, high-quality works is becoming smaller, causing per-piece prices to continue rising regardless of more particular bidding by collectors. At the same time, baseline prices are still rising slowly against established Western names, making Chinese art still relatively undervalued — something that Chinese collectors keenly understand, which is why they’re purchasing only the best works now and holding onto their collections.

Source: Jing Daily