Amid Market Turbulence, More Chinese Investors May Turn To Art

Global Market Turmoil, Few Investment Options, Rampant Inflation Should See More New Chinese Collectors Bidding This Fall

Art, watches, wine: Chinese collectors flock to auction hotspots like Hong Kong and Beijing in their search for stable portable investments

Art, watches, wine: Chinese collectors flock to auction hotspots like Hong Kong and Beijing in their search for stable portable investments

With global financial markets around the world reacting violently to the debt problems plaguing Europe and the U.S., gold hitting US$1,700 per ounce for the first time, inflation in China continuing to hit new highs and the real estate market remaining volatile, Chinese investors are likely to maintain their preference for stability and long-term gain. Having relatively few investment options at their disposal, this means we can expect more of these investors to join the ranks of China’s new collectors, who have increasingly driven sales at auction houses not only in mainland China but also Hong Kong, London and New York.

In the last two years, as Jing Daily has previously noted, this class of collectors has aggressively sought to diversify their assets with comparatively safe investments like art, fine wine, rare watches and gold and jewelry — items seen by many in China as “portable hedges” that will hold or grow value in the face of inflation or gradual revaluation of the yuan. As Francois Curiel, Christie’s top man in Asia, recently told Economic Information, Chinese collectors played a key role in the US$482.5 million worth of revenue Christie’s Asia pulled in during the first half of 2011, noting that buyers who previously homed in solely on traditional Chinese art or antiques are now getting more involved in the Chinese contemporary art market. So, in the months ahead, as markets remain sensitive and the autumn auction season draws ever closer, what can we expect to see?

In Jing Daily’s view, expect to see even more competition for sought-after wines like Lafite and Petrus, intense demand for rare watches and gold jewelry, and a noticeably greater interest in Chinese contemporary art among Chinese buyers. Blue-chip artists who have proven particularly popular among mainland Chinese buyers, including Zeng Fanzhi and Liu Ye, could see new records this fall, with the increasing scarcity of their top-quality works leading to strong bidding. While we’ll have to wait until the fall auction season to see for certain, the current global economic uncertainty, mixed with domestic Chinese factors like inflation and possible yuan revaluation, should be enough to convince more investors and aspring collectors to do their research and get ready to start bidding in Hong Kong, Beijing or even New York in the year ahead.


Art & Design, Fashion, Hard Luxury, Market Analysis