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'....