The Art Market: Impact of Weakening Chinese Economy

‘Girls in the Windows, New York’ (1960) by Ormond Gigli

Inevitably, all conversations in China turned to its weakening economy and whether this would affect the art market. Dealers tended to be upbeat though, according to collector Qiao Zhibing, the market has slackened: “Before the slowdown, buyers would have ‘definitely want’ and ‘maybe’ pieces and buy both; now they only buy the ‘definite’ ones,” he said. However, he added: “The rising middle class is interested in art and will buy to decorate their homes, and this will grow the market here”.

Big buyers will still be focused on ultra high-end paintings (the big uptrend of 2015 was mainly driven by a few unprecedented sales), while less prominent buyers might have a closer look into photographs as soon as the Chinese turmoil eases. Prices will certainly surpass previous tops when buyers will be more educated about the inner value of photography: cheaper and timeless, while less complex than modern art.

I’m wondering if the average price of paintings will be sustained in the coming years : Will there be as many impressive lots ? Will this lack of liquidity in the high-end inflates lower, fairly priced works ? Will there finally be a move into photographs ?

The fact that prices may at least stay flat, or fall in a context of moderate economic growth would not be unsurprising but it is the sign that prices in the market will move closer to home, at a less inherently speculative level.

→ The Financial Times