The year 2021 saw a dramatic expansion of the art infrastructure in China, according to the 2022 Art Basel and UBS Global Art Market Report, written by the cultural economist and founder of Arts Economics, Dr. Clare McAndrew.
Greater China commanded the second-largest art market globally, second only to the US, with sales increasing by just over one third (35%) during 2021, reaching $13.4 billion and commanding some 20% share of the global market.
The rise was fueled partly by a strengthening yuan, writes McAndrew, but principally by strong auction sales and continuing expansion of the gallery sector. Some 25 new auction businesses, as well as almost 30 new galleries, appeared on the scene in 2021 alone.
‘That is a very important finding, because even though we think of China as a normal modern market, and it has real buying power, it was quite behind in terms of infrastructure,’ McAndrew says. ‘The market just hasn’t been around as long.’
A rapid expansion in wealth, and greater growth to come
Burgeoning riches helped to drive luxury spending. The country gained billionaires at an even faster pace than the US (the number in China grew by a whopping 28%, to 623, versus 13% in the US, to 737). China is now home to some 23% of the world’s billionaires.
And the very wealthiest were quite busy buying art in 2021. Nearly half of Chinese high net worth (HNW) collectors who participated in the Art Market report (44%) spent more than $1 million – the highest portion of any country surveyed.
The growth has come in parallel with the reopening of societies, encompassing the climbing rates of international travel, including to events like art fairs, which have been the lifeblood of the art market.
‘The very wealthy have got wealthier and once they have been able to access the supply, they have been as keen to buy as ever,’ McAndrew says.
And the population with money to spend on luxury items is forecast to expand dramatically, meaning China may be flexing its power even more in the years to come. The number of millionaires in China is expected to grow by as much as 80% by 2025, according to McAndrew’s research.
But Chinese collectors at all levels of wealth helped to power the market’s dramatic growth.
‘Our Chinese collectors are active on multiple levels – on the primary market with acquisition from local and international galleries and on the secondary market through auctions,’ says Enrico Polato, founder of Capsule Shanghai, based in the city’s Xuhui District. ‘We recorded an increased interest in our program among local buyers throughout 2021, especially from a younger generation of collectors.’
Polato points out that local municipalities, as well as the federal government, have helped to till the soil for the flowering not only of the market, but also of the museum scene. McAndrew’s report found that at least seven public and private museums had launched in the country in 2021.
‘The increasing number of museums, private or public, opened in recent years has reshaped the cultural landscape in key cities, and also created a growing interest in the arts among a new public with high spending power,’ Polato says. ‘These infrastructures are often part of larger real estate projects supported and advocated by the local government. This, as a consequence, has created a new environment [that is] attracting commercial galleries and auction houses to set up a space in China.’
A sudden expansion, years in the works
‘The change has been quite amazing, but it didn’t happen overnight,’ says the Singaporean collector Cindy Chua-Tay, who cites years of growth in art fairs such as Art Basel Hong Kong (which took over the existing Art HK in 2013) and the West Bund Art & Design fair in Shanghai, established in 2014. Additionally, galleries such as Gagosian, Zwirner, and Pace have shown a real commitment to growing the Chinese market, she says.
She also highlights international collaborations such as the Centre Pompidou x West Bund Museum Project, a partnership between the French museum and a Chinese development group in a David Chipperfield-designed building in Shanghai’s Xuhui Waterfront sector (‘They’ve been very thoughtful in the shows they’ve curated’) and the partnership between collector Budi Tek’s Yuz Museum in Shanghai and the Los Angeles County Museum of Art.
On the foundations built by these efforts, new venues have appeared, such as Beijing’s nearly 12,000-square-meter Blanc Art Space, which opened in October 2021 within the Tianzhu free trade zone, featuring exhibition spaces, both temporary and long term, as well as art storage and auction rooms. It has two buildings, one for antique arts, the other for contemporary art.
As Polato describes it: ‘It acts as a foreign culture trade service platform created by the ministry of culture and the Beijing government. I believe Blanc is an important step forward in creating a mature and professional environment for art trading.’
Bumps in the road?
Surveyed during 2021, dealers in China expressed tremendous optimism, with some 59% expecting that sales would be higher in 2022. But that was before Russia’s invasion of Ukraine sent shockwaves throughout global markets, and before a fifth wave of COVID-19 cases in China.
Nearly 400,000 infections had been reported in Mainland China at the time of writing, and as many as 73 of China’s largest cities were under some form of lockdown, according to the South China Morning Post.
Moreover, during the run-up to this year’s Winter Olympics in Beijing, President Xi Jinping of China and Russia’s president, Vladimir Putin, proclaimed ‘no limits’ to their countries’ friendship. In addition, Xi has declined to condemn Putin’s brutal war in Ukraine, while also trying to maintain good relations with the US.
‘Many people in China are really unhappy with the way the government is handling things,’ McAndrew says. ‘If they jumped into bed with one or the other side that would be clearer, but by trying to be everybody’s friend, they’re isolating themselves. That’s not good for discretionary luxury purchasing.’
While looking back on a successful 2021, Polato foresees a slowing of the growth of the market. ‘International art fairs and exhibitions at the gallery performed successfully and clients came in support in multiple ways after the uncertainties caused by the pandemic,’ he says. ‘I was very optimistic that this trend will continue in 2022 but I expect that the recent developments of the events in Europe and the current COVID wave in China might affect the trend for at least the first half of the year.’
But although the road ahead may be bumpy, Chua-Tay expresses confidence. ‘This new fifth wave has placed a bit of a hurdle ahead,’ she says, ‘but I wouldn’t say it’s a hurdle that can’t be overcome. This too shall pass. The art market is so robust there’s no question in my mind that it will come back.’
Brian Boucher is a writer and art market commentator based in New York City.
The 2022 Art Basel and UBS Global Art Market Report, written by the cultural economist and founder of Arts Economics, Dr. Clare McAndrew, can be downloaded here.
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