This market is too big to ignore

The Chinese art market is back at the top of the tree.

After a firm correction in 2012 following a decade of exceptional growth, the sector recaptured the title of the world's largest art and antiques market in 2013, according to figures from TEFAF.

And here's the thing.

This time, China's doing it right.

No more wild prices. No more unsustainable growth.

Instead we have cautious but determined buying from an increasingly value-conscious clientele.

That is the key message I've taken from the Global Chinese Art Auction Market Report, published this month by artnet in conjunction with the China Association of Auctioneers (CAA).

Chenghua chicken cup
A 15th century Meiyintang "chicken cup" set a Chinese work of art record of $36.2m in April

Sales in all sectors are showing year-on-year gains, says the report, which adds that "more cautious buying and a moderation in prices at auction" has experts noticing "a new phase of maturity in the Chinese market".

"Buyers have become more vigilant regarding provenance, along with a lower tolerance for what was perceived to be over-priced, low-quality works," it adds.

This is great news if you're thinking of investing in Chinese art. Because market volatility means any investment involves a large amount of guesswork - something I hate. A mature market is one that can be predicted with a greater degree of accuracy.

(We're still waiting for the Chinese wine market to show a similar maturation following the great boom and bust of 2011.)

But why am I telling you this?

Because if you're serious about locating new opportunities to invest in collectibles, the Chinese art market is too big to ignore.

"The entire global market for Chinese artworks totaled $8.5 billion in 2013, some 28% of the value of total sales of art and antiques auctioned around the world", the report states.

There are now 382 auction houses in China, the highest in the country's history.

What's more, this is a market that attracts high rollers, meaning the best pieces have many suitors fighting over them.

"A low range of attractive options for investment, combined with a currency that is still not fully convertible, has supported a significant interest in alternative investments, including art and antiques," says artnet.

The big sectors to follow

But which sectors within Chinese art are the ones to investigate, you ask?

Fine Chinese paintings and calligraphy comprised 66% of auctions by value in mainland China last year, with modern works providing 60% of the sector's value.

The Chinese antiques and artworks sector - at 20% - was the second most popular sector in 2013 within the country. But! This is a sector that is even bigger outside China - due to the ongoing mass repatriation of Chinese artworks. In fact, Chinese antiques and artworks account for 72% of all Chinese art sales (47% by value) outside of the country.

One last thought

The Chinese art market is hugely exciting. But also potentially bewildering to the novice.

So if you're interested in dipping your toe in the water, know this.

I'm not an expert on the sector - merely a fascinated observer.

Make sure you talk to someone who is before taking the plunge.

Until next week,


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