Chinese auction houses are reporting sales numbers cut in half from last year*, but is that really a bad thing? My answer is unequivocally no. The Art Newspaper published the 2012 figures from both Poly International and Guardian today (down 49 and 54 percent, respectively), as well as Christie’s and Sotheby’s in Hong Kong (down 38 and 15 percent, respectively). The secondary art market definitely took a nosedive, but I would argue these numbers signal a healthy shift for long-term growth.
Melanie Gerlis in TAN doesn’t agree:
A slowdown in China is bad news for the art market because, since 2008, demand from Asia has helped to mask the impact of reduced Western buying. Auction houses and big-name galleries have invested heavily in Hong Kong and mainland China since then.
However, this is the wrong way to look at it. Sales at Chinese auction houses have surged along with the economy over the last five years, but much of that growth was a result of speculative investment by unsophisticated buyers relying on the greater fool theory to make a buck; that is, when auction sales weren’t just excuses for money laundering and government bribes. A deflation of the bubble signals that the market is finally purging itself of this sort of speculation, leaving room for art lovers to develop a healthy market based on increasingly sophisticated collecting tastes (possibly with the help of developing regulatory oversight). In the TAN article, art economist Clare McAndrew states as much, noting, “It’s much better for the longevity of [China’s] market for it to cool down and get a bit of breadth [in terms of its collector base].”
Furthermore, there isn’t much evidence of reduced Western buying in the last year or two. I’m sure Chinese buying in Hong Kong (not on the mainland, which is largely out of the reach of Western buyers), did lessen the impact of the 2008 financial crisis for Christie’s and Sotheby’s. But Chinese economic growth has slowed, accounting for the part of the dip in sales that can’t be attributed to decreasing speculation, and the wealthy are making money again in the U.S. and Europe, boosting art spending here (particularly in New York).
If these 2012 numbers really do signal a shift toward a more serious art market in China, we should be celebrating.
— Shane Ferro
*This is purely data coming out of the secondary market in China — galleries are an entirely different thing, on which we have no data.