American Markets Relegated to Second Place

In an interview, economist Clare McAndrew explains how China has risen up to become the world’s leading market.

In commemoration of the jubilee of the The European Fine Art Fair, economist Clare McAndrew has released a report concerning economic developments in the field of the fine arts over the past 25 years. New figures have come out which explain what the website Artprice.com had already announced several months ago, namely that China has reached first place in the world’s markets.

The Figaro:How was this report established?

Clare McAndrew: The foundation that established the TEFAF ordered the report. The report itself was a result of my conducting seven years of research, and sixty-something interviews with market experts, collectors and journalists worldwide. The report was comprised of figures from some 365 international auction houses and, in fact, 40,000 fairly recent galleries.

What does the report reveal?

This is a historic moment in which China’s economy has made a meteoric improvement of 7 percentage points in the past four years, from 23 percent to 30 percent, and as a result the U.S. has been relegated to second place. The United Kingdom, which was already overtaken by China in 2010, kept its third place, with a market share of 22 percent. However, France remains in a distant fourth place, with only 6 percent. China’s rise, along with a general increase in art sales, particularly in the field of modern and contemporary art which accounts for 70 percent of the market, has led to a strengthening of the global art and antiques markets. In 2011, sales have grown at a rate of 7 percent to a total of 46.1 billion Euros, which demonstrates an overall increase of 63 percent since the 2009 economic crisis. Despite the fact that the prerecession peak in 2007 of 48.1 billion Euros has not been equaled, the market has still recovered tremendously over the past two years.

How do you explain the predominance of the Chinese market?

This predominance is attributed to individual enrichment due to strong domestic investment and dynamic Chinese buyers, despite the global recession. The increasing difficulties with finances and real estate in China have pushed Chinese consumers to look to art as an investment alternative. However, the Chinese art market will soon become too hot and this will require more stable long-term growth.