Friday, February 08, 2008

Reading all the Tea Leaves in China

The big surprise isn't so much that China now ranks as the third most important art market by value, but rather that the country it just displaced was France.

France? Really??? Did Pinault skew the curve all by himself? (OK, so there goes my chance of ever brokering a show at the Pompedieu....)


From
The Art Newspaper:
China is the third most important art market by value, replacing France, which has long held the coveted spot, after New York and London, a leading economist has said.

A report by Dr Clare McAndrew, who runs a research company Art Economics, commissioned by the organisers of The European Fine Art Fair (Tefaf), Maastricht, and including both auction and dealer data, found that by the end of 2006, China had already become the fourth largest global art market by value, with a 5% share. The US, UK and France were at 46%, 27% and 6% respectively.

The report did not go beyond 2006, but Dr McAndrew told The Art Newspaper that “the trend has continued in 2007 and I would estimate that China has now overtaken France.” In 2005, China accounted for only 3.7% of the global market, according to analysis from Artprice.com, whereas France was at 6.6%.
From reports of the the auction results in London this week, one would be forgiven for thinking Russia has already lunged up into the top three. From The New York Times:
A geographical breakdown of buyers was telling, with 82 percent European (a term that Sotheby’s said includes Russian as well as British) and only 13 percent American.

While Sotheby’s would not say how many Russians bought art on Tuesday night, their presence was obvious. Mikhail Kamensky, director of Sotheby’s Russia, could be seen clutching a telephone while bidding on behalf of an unidentified client who outmaneuvered three other contenders for Marc’s 1910 canvas “Grazing Horses III,” a scene in the Bavarian countryside. The painting sold for $24.3 million, breaking the artist’s previous record of $20.2 million, set last November in New York. It was the night’s most expensive work.
But what are the conclusions to be drawn from the bellwether auction results? Artinfo.com seems to have struck the gloomiest note in assessing the sales---that's if you don't count MAO ;-p. From artinfo.com:
Set in a climate of shaky global markets, this week’s two key Impressionist and Modern sales in London performed surprisingly well, while Christie’s postwar and contemporary evening sale on Wednesday evening, despite a near-record-breaking Francis Bacon painting, showed unmistakable signs of the market’s weakening.
So what do the teas leaves tell us: ooooohhhmmmm....I see...I see....indications of a weakening, with the red hot secondary Postwar and Contemporary market perhaps cooling a bit more than other work*, but strong evidence that other collectors (read Russians and Chinese collectors) will indeed pick up at least part of the slack as Americans tread more cautiously. Of course, the pending American contemporary auctions will be easier to read with regards to impact on my business (we're not selling Impressionist works to Russians...yet anyway). Fingers crossed and all that....

*Which should not be interpreted as reason to pass up on great work at good prices in the primary market, mind you. Just sayin'....

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8 Comments:

Blogger George said...

As I noted before the last Postwar and Contemporary auctions saw price appreciation that is unsustainable. A cooling off period is a logical expectation.

While I expect the auction market to cool down a bit I do not think it is going to collapse. Money is flowing into art and collectibles as a store of value and will continue to do so as long as the world banks flood the planet with cash by lowering interest rates. A case in point would be the recent Sotheby’s sale of jewels which saw 78 of 83 lots sold and most near the high end of the estimates.

I posted a nice chart of Sotheby’s stock [NYSE:BID} along with a commentary last night on my other blog, FutureModern Finance

2/08/2008 09:36:00 AM  
Anonymous Anonymous said...

When you submit your proposal to the Pompidou, make you sure you spell everyone's name right. ; )

copy editrice

2/08/2008 10:18:00 AM  
Anonymous Anonymous said...

I encourage the Chinese to buy lots of US art. It will help balance the trade deficit. (Yes, this is a bit of snark.)

2/08/2008 10:25:00 AM  
Blogger Edward_ said...

When you submit your proposal to the Pompidou, make you sure you spell everyone's name right. ; )

They should change the spelling to my way...it would look more French. ;-)

2/08/2008 10:33:00 AM  
Anonymous Anonymous said...

Mais oui, Eduoard, t'as raison!

2/08/2008 10:45:00 AM  
Anonymous Mandy said...

Quick edit: "Pompidou"

2/08/2008 01:58:00 PM  
Blogger Kate said...

and "dieu" means "god". I just thought you were making a funny....

2/08/2008 11:55:00 PM  
Blogger Young said...

Interesting, but where's Germany on this list?? I wonder how they are defining the breadth of 'art market', as I thought Germany's contemporary art values outweighed even that of the U.K. Think top-ten earners Gerhard Richter, Sigmar Polke, Rosemarie Trockel...not to mention the infantry of Deutsche Fotografen... Or is one no longer counted as German, if your pictures are hanging in Chelsea?

2/20/2008 07:57:00 AM  

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