Trade and Taste Forecast Changing Trends in China’s Art Market

From March 10-19, 2016, 5 auction houses and 45 international Asian art galleries will fill Manhattan with museum-quality paintings, sculptures, jewelry, textiles, and photographs from across Asia in hopes that collectors, mainly from China, will bring out their checkbooks.

According to artnet data cited in an article published on Barron’s, China sold $4.4 billion in fine art at auction in 2014, representing about 27% of global sales. Christie’s acknowledged that 27% of its global auction sales came from Asian buyers that same year.


BARRON’S, “Contributions to Sales Growth, 2004-2014” Source: artnet and Benjamin Mandel calculations

On the eve of Asia Week 2016, concerns about China’s economic slump are spilling over into the art market. James Lally, owner of J.J. Lally & Co. Gallery in New York, states in Bloomberg Business, “I think we’ve already seen a moderation in activity on the international market for Chinese art…the buyers are not as euphoric as they were five years ago.”

Benjamin Mandel, executive director of multi-asset solutions at JP Morgan, states, “China’s extraordinary period of catch-up growth has largely played out.”

Looking through the lens of international trade theory, we can see that China’s position in the art market over the past 15 years is changing as their economic and cultural climate shifts through globalization.


BARRON’S, “Auction Sales in China, 2004-2014” Source: 2015 TEFAF Report, Art Economics and AMMA


Günther G. Schulze outlines a comprehensive survey of international trade economics as it relates to art in his aptly titled “International Trade In Art.” In his introduction, Schulze states, “art markets are arguably among the most internationalized goods markets: Van Gogh’s paintings can be admired in New York [and] a large collection of Egyptian art is found in Berlin” (109). Although international trade is the reason we can access encyclopedic collections of historical artifacts in nearly every major metropolis, art is markedly different from other types of trade.

Ricardian and Heckscher-Ohlin models describe trade in homogenous goods between dissimilar economies. While artworks can be assumed to have constant returns, they are not homogenous (122-123). Furthermore, Schulze argues that because most art trading takes place between industrialized countries with similar technologies and factor endowments, traditional trade theory cannot explain all of its movements.

By comparing the ratio of total art trade to total trade with the average individual country ratio of art exports to total exports, Schulze determined that large trading countries tend to have higher art trade ratios (114). Thus, China’s extraordinary economic growth after it entered the WTO correlates to its increased interest in art collecting and its economic downturn explains the slightly downward trend in sales of Chinese art and purchases by Chinese collectors.

Joanna Bialynicka-Birula describes the internal and external factors that influence art sales in her article, “Determinants of International Trade in Art from System Theory Perspective.” Like Schulze, she cites the wealth of a country as one of the elements of a thriving domestic art market (197).

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“Fig. 6 Model of connections of the art market and international trade of art” Source: Bialynicka-Birula (198)

In Bialynicka-Birula’s article, she cites geographic distance and cultural history as two external factors that determine art tastes (198). Schulze, too, identifies a relationship between art consumption and cultural proximity: people consume more art from nearby countries because they have access to and identify with those cultures (119).

These factors explain the overwhelming interest of Chinese collectors in Chinese art during the initial years of their art boom. However, as China became a world player on all other fronts, the tastes of its collectors shifted west.

On November 9, 2015, in the midst of a downturn in China’s economy that sparked debates about worldwide economic health, the owners of Shanghai’s Long Museum paid $170.4 million for Amedeo Modigliani’s Reclining Nude at Christie’s in New York. The piece set a world price record for the artist when collectors Liu Yiqian and his wife Wang Wei purchased it.


Reclining Nude (1917-1918) by Amedeo Modigliani, Source: Christie’s

Likewise, Chinese media executive Wang Zhongjun paid $62 million for a Van Gogh still-life in 2014. Jinqing Cai, president of Christie’s China, writes, “the industry is heading to a more healthy, diverse and dynamic space.” Perhaps due to the uncertainty surrounding China’s assets, collectors are broadening their tastes to diversify their investments as they live an increasingly globalized lifestyle.

As China’s economy attempts to recover, we may see a rebounding art market paralleled with a continuously evolving set of tastes. Regardless, Asia Week 2016 Gallerist Suneet Kapoor maintains that Chinese collectors will remain “a staple…because they still have such buying power.”






[5] Schulze, Günther G. “International Trade in Art.” Journal of Cultural Economics 23, nos. 1-2: 109-36.

[6] Bialynicka-Birula, Joanna. “Determinants of International Trade in Art from System Theory Perspective.” International Journal of Business and Management 2, no. 3 (2014): 192-206.

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