How to make money from the booming Chinese market
The Chinese market may be fuelling auction houses across the world, but how do you get in on the profits?
Paul Fraser Collectibles, Thursday 12 July 2012
More Art & Photography news | View our stock for sale | Learn about our 120% Guarantee | Download our iPhone app | Sign-up for your Free Newsletter
I'm a regular reader of the site, and I've noticed that the Chinese market is prospering at the moment. I'm keen to capitalise on their spending, can you tell me what I should be buying? - Sarah McCain, Santa Fe
Well, it's certainly true that the Chinese market is doing exceedingly well at the moment, and has been for the past few years. The booming economy in the country has ensured that there are now well over a million millionaires - and they are prepared to spend huge sums to get the collectibles they want.
Last month's Barclays Wealth Report confirmed the Chinese interest in collectibles as investments. The country's wealthiest individuals have 17% of their money placed in treasure assets - art, gold and jewellery are particularly popular - compared to just 7% in the UK, and 9% in the US.
The country's art market has also recently overtaken the US as the world's largest, rising to a 30% share in 2011, according to a report by the European Art Foundation. So art would be a great place for you to start.
Chinese buying is predominately centred on items which originate from their own country. There is a strong sense of nationalism that inspires collectors to invest in pieces that are distinctly Chinese, such as Li Keran's $19.4m Shaosan, which is a brilliant depiction of Mao Zedong's birthplace, or Qi Baishi's Eagle Standing on a Pine Tree - the most valuable Chinese artwork ever sold - which is a traditional calligraphic scroll painting.
This patriotism is also demonstrated perfectly in the stamps market, where a "The Whole Country is Red" specimen sold for $1.15m in May this year, breaking the world record for a Chinese stamp at auction.
Another market which has been boosted by the new Chinese wave of collectors is wine, particularly in Hong Kong, where record prices are continually smashed by those looking to flaunt their new-found wealth. What's more, Chinese collectors generally aren't interested in preserving the bottles in a dusty old cellar somewhere and have been known to pop the cork on their latest purchase to celebrate the purchase itself! This ensures a continuing stream of demand for more wine - excellent news for those looking to profit.
For the sake of brevity I've had to speak in fairly general terms here. Before investing in individual pieces I would strongly advise you to do your homework and consult a collectibles expert before parting with any money - they can help you pinpoint specific areas for investment within the art, stamps and wines sectors.
Recent and related articles
· Starting an investment-grade collection | 4 July 2012
· HR Dietrich's Americana collection | 4 July 2012
· Indonesia art market profile | 2 July 2012
Guides and analysis