China’s art market has cooled down significantly this year due to slower economic growth, rampant counterfeits and speculations

Replicas strangling China’s art market

Staff Reporter

2013-12-29

China’s art market has cooled down significantly this year due to slower economic growth, rampant counterfeits and speculations, reports the Chinese language Economic Information Daily.The Eighth China (Changchun) Folk Art Fair, held in the capital of Jilin province in August, is one of the largest art auctions in the country. However, the numbers of visitors and items exhibited at the fair have plunged significantly.

One of the exhibitors, surnamed Huang, said most of his exhibited items sold out in a day or two in the past. This year, as of day three he had yet to strike a single deal. Another exhibitor said less than 50 people visited his stand. He sold over one million yuan (US$164,000) in art pieces last year but he has only sold a few pieces this year.

Since the art market has declined for the second consecutive year, the number of art pieces with high price tags has also decreased. An exhibitor from Anshan, Liaoning province, said his largest jade pieces, named Generations of Senior Officials, could have been sold at a good price a few years ago but only a handful of people asked about it this year. Those who have showed interest offered extremely low prices.

China Association of Auctioneers’ data showed the number of items worth over ten million yuan (US$1.64 million) auctioned in the art fairs decreased 375 from 2011 to 2012 and their volume of transactions dropped 66.21% to 4.6 billion yuan (US$757 million). The overall transaction volume of art markets decreased 47.88%, or 26.5 billion yuan (US$4.3 billion), during the same period.

Artron, a Chinese art market observer, said the number of auctioneers, auctions and art pieces actually increased in Spring this year. However, the number of high quality art pieces plunged and dragged down the amount and volume of transactions and the price of a single item.

Many people took the art pieces they bought to the Changchun art fair for appraisal services. Gao Lixin, a consultant to multiple Chinese art sellers, said replicas and counterfeits have been rampant in the market but many buyers hope they can find a real one and make money from it.

“There are too many replicas in the market which have affected decent sellers. Collectors now decide to observe rather than buy due to the chaotic market, which is also one of the reasons that sales in art fairs have been poor. People fear the items they buy will be fake,” said a seller. Replicas have been sold as genuine ones and the collectors who accidentally bought them often try to sell them to other buyers.

Most of the buyers in the market are speculators who have little knowledge of the art pieces they buy and only intend to become overnight billionaires through their art collections. Experts contribute market disturbances to a lack of a monitoring system, authoritative appraisal institutions and standards. Private appraisal services have boomed in China but appraisal scams have increased as a result. Anyone can obtain an appraisal certificate as long as they have enough money. Industrial insiders said China’s art market is likely to go through an adjustment in the next two to three years.