Papoyan L. G., Lobanova V. V., Mikhaylenko O. H.

Oles Honchar Dnipropetrovsk National University, Ukraine

MODERN STATE OF THE ART MARKET IN CHINA

Unlike other global markets (financial markets, goods and services, etc.) economists pay very little attention to the global art market – the market of works of art. Art – market is socio – economic and cultural – historical phenomenon and mechanism, a system of commodity circulation of works of art. Of course, the annual turnover of the art market is not comparable to the size of other world markets, but the art-market has both common features with any other market, and the quality and characteristic for only this segment of the economy. This is especially true for pricing and infrastructure.

Today, the global art market can be considered bipolar. In the struggle for the right to be called the world’s art centers along with New York and London Beijing and Hong Kong entered. Western art market showed steady growth after the crisis, which allows to predict its future development. More controversial is the art market that plummeted in 2012 after a successful growth over the 2008–2011 years. There are some problems and peculiarities of the Chinese art-market that determine its future development.

Artprice and Artron estimated the volume of world auction market 12.269 billion dollars in 2012. Of these 5,068 mln dollars belong to auctions in China (41.3 %), to USA – 3.345 billion dollars (27 %), UK – 2.167 (18 %), France – 0.505 billion dollars (4 % ), Germany – 0.188 billion dollars (2 %) [1].

The largest art market for the past 3 years was the market in China. Although some sources (TEFAF) gave the first place to the USA, information agency Art Market Monitor of Artron (AMMA) and Artprice emphasize the dominant position of China in the global art market [2]. The share of Chinese auction turnover was about 17 % in the world in 2009, and in 2010–2011 was 33 % and 41 % respectively. But it should be noticed that the rapid recovery in the Chinese art market was due to an increase in the number of auction houses in the country and activity of existing ones, and not because of the deteriorating situation in London or New York [3]. Data on the art market in China is shown in Figure 1.

Figure 1. Auction sales in China in 2008–2012, units, bln dol. [3]

Figure 1 shows that since 2010 the Chinese art market has been rapidly growing, but in 2012 the market began to decline. Experts see the reasons for the decline in the speculative nature of the market. In the China artwork is usually perceived as an investment asset, collecting for fun here is less developed than in the West. This is supported by the following figures. From 449,500 lots sold worldwide in 2012, 32 % of them belong to China (149,509 lots). But total revenue from them is much greater (41.3 % of the global auction turnover). Meanwhile, with about 315 000 per year of lots sold in the West, 80 % are the items that cost less than 5000 dollars, which means they were bought, most likely, not for profit. Another proof of this is the ranking of the sold lots by price [3].

During the growth period of the Chinese art market, the number of sold lots worth more than $ 10 million increased from 7 to 22 in 2009–2011, and in 2012 was reduced by 3.5 times. Number of lots from 1 to 5 million dollars in the same period increased by almost 8 times and was 1013 units. This means that the art market in China is characterized by astronomical prices for a limited number of works during 2010–2011, that led to an increase in auction sales in that period, a decrease of sold lots belonging to the category above 1 million dollars per unit led to its decline [3].

The structure of the Chinese art market by category is slightly different from the western. It should be noted that the auction houses in China are focused exclusively on Chinese art. So art in China is divided into 2 categories: Chinese painting and calligraphy and painting and contemporary art. Another significant category of Chinese art market is porcelain. In 2012, traditional Chinese painting and calligraphy have gained 51.11 % of all auction sales and works of oil painting and contemporary art – only 1.8 %. The second is porcelain. Their share was 38.49 %. This structure throughout the period did not change significantly, but in absolute terms there is a significant trend. If the total value of contemporary art for years 2009–2011 increased by an average of 300 million dollar, the cost of traditional painting and calligraphy increased by an average of 3.5 billion dollars. In 2012, the volume of sales decreased by 46 % compared to 2011 and amounted to 4.323 billion dollars. It can be concluded that the traditional painting and calligraphy is based on the Chinese art market and on changes in sales of works of art in this segment depends on the overall position of China in the global art market.

As for the auction houses, the major players in the Chinese market are still Poly International and China Guardian and they earned together 1.052 billion dollars. (about 20 % of the market in China) [3].

Thus, the development of the global art market is comparable to any other world market. The global financial crisis had a significant impact on the art-market development. In 2009 it has fallen by 47 %, but from 2010 began to gradually recover. Today, the world art market is bipolar, reminding us of the eternal struggle of East and West. China is a leader for 3 years in a row leaving behind the UK and the USA. Although the art market in China has fallen significantly in 2012, it is enough to mention the development of the global art market after the recession in 2008, to believe in the restoration of China’s art market.

The list of references:

1. Матеріали інформаційного сайту «Инвестиции в искусство» [Electronic resource]. – Mode of access: http://www.artinvestment.ru/invest/rating/20130409_artprice_report.html

2. Матеріали інформаційного сайту «Инвестиции в искусство» [Electronic resource]. – Mode of access: http://www.artinvestment.ru/news/auctnews/20130315_tefaf_art_market_report.html

3. Звіт інформаційного агентства Artprice «Theartmarketin 2012: A dialogue between East and West» [Electronic resource]. – Mode of access: http://www.imgpublic.artprice.com/ pdf/the_art_market2012_online_en.pdf