US-China trade war and fears of debt crisis see art sales in China drop

There was less art sold in China last year than in Brexit-embroiled Britain as Chinese collectors stayed on the sidelines during Beijing’s drawn-out negotiations with the US to avoid a full-scale trade war, an annual art market survey finds.

Art sales in China fell three per cent to US$12.9 billion, with demand also hurt by fears of a debt crisis and there being fewer high-quality pieces coming to the market, according to the 2019 Art Basel and UBS Global Art Market Report.

China briefly became the world’s biggest art market in 2011 when sales jumped exponentially to nearly US$14 billion following a massive economic stimulus package in the aftermath of the global financial crisis. But the bubble quickly burst, and the US soon reclaimed the number one spot.

Last year, the US sold a record US$29.9 billion of art on a strong economy and temporary tax breaks, sending its share of the global market up to 44 per cent, from 42 per cent in 2017. In the UK, sales rose eight per cent to nearly US$14 billion despite all the Brexit-related uncertainties and it overtook China to claim second place. Overall, the art market grew six per cent to US$67.4 billion last year.

With China being a weak spot, the Hong Kong auctions market sold 22 per cent less last year, compared with a six per cent decline for the mainland auctions market. The precipitous fall had to do with the fact that the market had a record year in 2017, says Clare McAndrew, art economist and author of the report.