Recent studies have shown that Chinese investors are choosing to invest in contemporary art in a big way, creating a significant impact on the global art investment market. So why is this happening, what are they buying and how can we learn from this trend?
Several highly publicised sales have seen Chinese collectors win at auction in recent years. For example, Christie’s saw Modigliani’s Reclining Nude sell for a record-breaking US$170.4 million in 2015, and Claude et Paloma by Picasso sell for US$28.2 million in 2013.
However, according to a report from Art Basel and UBS, China only became the world’s third-largest art market in 2016, when the country accounted for 20% of global sales of $57 billion. Looking back a decade, China accounted for just 9% of total sales worldwide.
What is happening to create such rapid upward movement?
Chinese buyers are becoming increasingly important in the art investment world for several reasons.
Firstly, the country is a growing economic power, and as a result there is a rapidly expanding middle class. Their wealth, spending habits and desire to diversify into new and exciting asset classes places this demographic amongst the most important art buyers in the world.
Secondly, any changes to the global economy can create a potentially beneficial exchange rate. For this reason, any dip in the UK economy due to Brexit or other events could position London as a key location to invest in contemporary art.
Thirdly, Beijing recently put measures in place to keep personal wealth within the country. While this has limited certain types of overseas acquisitions and investments, art collecting is still permitted, effectively elevating this asset among Chinese investors.
Finally, social media is making the art investment market far more accessible all around the globe, particularly for younger generations. “I use Instagram more than auction catalogues to see what’s on the market,” Chinese art collector Michael Xufu Huang recently told CNN.
China’s growing middle class includes many young collectors, many of whom are attracted to Western art as an investment.
“The younger generation of Chinese collectors have been educated around the world,” Huang explained to CNN. “We are global citizens, so works by artists from abroad echo our interests.”
Chinese collectors aren’t just looking for big names either. True, works by international blue chip artists such as da Vinci and van Gogh are in high demand, but as most works by these artists are owned by museums and galleries, they are rarely seen on the market.
In fact, many Chinese buyers are not afraid to invest in contemporary art by emerging names who have the potential for future growth in the market.
Here at Maddox Gallery, we believe in investing in art that resonates with you, and artists that you truly admire. This said, we also educate our visitors on the potential benefits of investing in emerging artists whose stars are yet to rise. By purchasing works early on in an artist’s career, a savvy collector can stand to see their value increase dramatically.
By researching artists on social media platforms, and finding works by emerging artists, we think there’s something to be learnt from this young generation of Chinese art collectors. If you’re looking to invest in contemporary art and improve your understanding of the market, why not visit at Maddox Gallery, and speak to our expert Sotheby’s-trained art consultants.
Written by James Nicholls, Managing Director and Curator, Maddox Galler