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China's billionaires set to dominate the world's art market

Asian buyers becoming more sophisticated as fortunes pile up

| China
A rare imperial embroidered Chinese dragon robe is displayed during a photocall for the Asian Art Week sales at Bonhams auction house in London on Nov. 2.   © NurPhoto/Getty Images

Alexandra Bregman is a teaching associate in business and economics at the Columbia Journalism School. She is author of "The Bouvier Affair: A True Story."

The Asian art market is currently dictated by Chinese players. And guess what, America? Soon, China will not need you anymore.

The eastern behemoth's booming economy has equated to staggering art sales this year while America's has faced obstacles. That has much to do with the fact that as other world powers have struggled against COVID-19, October 2020 data compiled by the Hurun Rich List shows that the number of Chinese billionaires is growing at the fastest pace in the country's history.

There are now 878 billionaires under 40 in China -- including 257 newly minted billionaires this year -- worth a total of $4 trillion, breaking their own previous records. After two generations of largely uninterrupted economic boom, 2020 may finally see the death of a once-celebrated Western postcolonial patrimony.

To put this in context, during the Communist Revolution, proletariat art replaced traditional Chinese landscape motifs, while other works synonymous with Imperial China were hidden, exported, or destroyed. Meanwhile, as early as the 17th century, European collectors began acquiring Chinoiserie-silks, porcelains, and furniture-as statement pieces for a worldly estate. This colonialist mentality endured well into the 20th century as Communist China's power grew, but that has slowly started to change.

As China's wealth increased, those stereotypically brash, overzealous Chinese buyers crowding auction houses in New York and London -- deemed an ignorant yet indispensable part of the burgeoning new art market -- were tolerated. After the 2008 financial crisis plunged the U.S. economy into severe recession, Chinese buyers became increasingly important, out of both inevitability and necessity.

From antiquities to contemporary Asian works, Chinese collectors were growing evermore sophisticated when it came to overseas acquisitions, which quickly led to at-home buying behavior to match. Now, China's domestic art market has grown so big that those New York and London auction houses may not be needed to sustain their buying interests.

The game-changing year of 2011 signified the shift, when 11 works worth $100 million were sold in China. Over one two-day period in 2014, Sotheby's Hong Kong team sold $47.5 million worth of contemporary Asian art. Data compiled by Artnet for the year showed a 9% year-on-year increase in auction houses dealing in Chinese art -- the largest jump in Asian art history. Two years later, Sotheby's New York brought in $60.4 million at its September 2016 Asian sale.

People look at a Chinese painting during the Sotheby's auction exhibition in Hong Kong on Oct. 3.   © AP

It has not been all smooth sailing. Some auction bids have occasionally gone unpaid and the astronomical numbers have dipped periodically. By 2017, many art naysayers were decrying "the end of the bubble." But the truth is that upward sales trends have continued.

The Chinese art market is not yet the fast-paced scene that characterized frenzied interest in Western contemporary and Impressionist art, pushing sales of individual works into the hundreds of millions of dollars. But the Asian art market was never the only indicator of a growing collector base in China, only their spending power on a particular day. Regular multimillion-dollar transactions have not only stabilized Asia's art market, but proven its sophistication. Chinese buyers are not going anywhere.

As the economic impact of the pandemic has brought so much of American business and beyond to a near-screeching halt, Chinese sales still boomed in the annual September auction cycle, and prices for material secured before COVID once again skyrocketed. In September, Christie's London took in $15 million in a single sale, while Sotheby's Asia Week in New York reaped $36.4 million.

Looking ahead to the next generation of Chinese collectors, there is a sense of restoration, of health, coming to a formerly wild and unpredictable boom market. The year 2020, of all years, may be the time when sanity finally returns. Still, with next year's March Asia Week looming, usually more exciting for dealers than the September season, there is growing anxiety that the buying frenzy will naturally end. Trump-enacted U.S. tariffs and China currency restrictions are not helping either. For the first time, Chinese art is now more expensive in the U.S. than anywhere else.

The counterweight to the expected purchasing slowdown is the enthusiasm in China for new museums. Statistics vary, but the last decade saw an average of 100 museums built every year in the country, with Forbes reporting 451 museum openings in 2012 alone. According to the South China Morning Post, China's museums received nearly 1 billion visitors in 2019.

And while some complain that traffic is still too low, especially in some of the country's poorer regions, every large-scale auction purchase will now have room at China's new museums, where the halls wait to be filled with even more treasures.

Literally and metaphorically, the power of these museums has yet to be seen, but they do provide a pathway to a broader artistic conversation about a globalized world where visualizing Chinese artistic significance can help make the connection to masterpieces beyond.

More museums, more people, more art in China mean less art in the West. As China's desire to consume and critique all kinds of art keeps surging, soon it will not just be antiquities from their home countries lining the country's museum halls. The reality is that, one by one, watershed Chinese acquisitions will not only have a lasting impact on their own country but, ultimately, the world over. China, the global economic powerhouse, will soon stand as an art capital on its own.

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