You Know It’s A BAAAAD Economy When The Chinese Stop Buying At Auction

Posted on October 7, 2011

Has the bubble burst?  Honk Kong is the third largest art market after London and New York and recent results at Southebys ‘ there suggest that things are cooling off after several heated years of astounding increases in record prices paid for typical Chinese items such as Asian Antiquities and fine wines.

The sales in Hong Kong are a barometer of the Asian art and collectibles market, which has come to be dominated by newly wealthy mainland Chinese. They have helped the city become the world’s third largest auction center after New York and London.

China became the world’s biggest art market last year, accounting for 33 percent of of global fine art sales, edging out the U.S. with 30 percent, according to Artprice, which tracks market prices.

Chinese investing strategies in art mirror classic American investing strategies in bad times – buy the blue chips only:

Art market observers said Asian buyers are getting pickier amid the wobbling financial markets. Sales of big-name Chinese artists are being snapped up while mid-tier names are being passed over.

Blue chip artists “come to market once in a lifetime,” said Andrew James, who owns a gallery in Shanghai. “You miss it now it’s going to disappear off the market for another 50, 60, 100 years so you’ve got to take the opportunity to get it.”

And so another western-dominated business – the auction business – is moving east.