Beware of structural collapse of the art market

After the spring auctions of several major auction houses in China were successively closed, the forecast for the auction year was market verified. Xi Mu, deputy head of the China Art Market Research Institute, said that in the confusing market situation, beware of structural collapse as the primary task.

>> Spring Auctions shrink by 50%

Looking at the auction market since 2011, there has been a clear downward trend. Last year, Xi Mu said that the market will decline in the forecast, verified by the market performance of the spring auction this year.

Judging from the data of China's largest auction company, China Guardian and Beijing Poly, the total sales turnover of Guardian in 2011 was 5.323 billion yuan, and the total turnover in autumn auction in 2011 was 3.858 billion yuan, and the total turnover in spring auction in 2012 was 21.41. Billion; Pauly made a spring auction of 6.13 billion yuan in 2011, 4.92 billion yuan in autumn 2011, and a total turnover of 3.03 billion yuan in 2012. Compared to last year's spring shoot, this year's spring rate shrinks to 50%. Xi Mu analysis, this year is the spring of the year, the growth rate of market size has a relatively large decline, one of the major features is that the bigger the decline in the size of enterprises, SMEs instead of flat.

“This year's market is more diversified, and this diversification is also the main reason for the large decline in large auction houses.” Xi Mu’s diversification includes several aspects. First of all, in the past, the scale of auction companies was relatively high. Now that emerging auction companies have mushroomed into the market, new auction companies have seized market share with differentiated features; secondly, auctions were mainly concentrated in Beijing and Shanghai. From the second half of last year to the spring auction this year, the auction companies in small and medium-sized cities grew rapidly and the regional market grew at a rapid rate. Finally, the rotation of the sector was also an important reason for the large decline in large auction houses. Chinese painting and calligraphy and ceramics are the major auction business. The two plates that have contributed the most, and now many of the plates, including ancient rare books, wenwan, etc., have played a very significant role in the market.

It is difficult for the ship to turn around. This is one of the reasons why the large-scale auction house has been hit hard by the sluggish market environment this year. Xi Mu analysis, the big auction house is difficult to achieve small and refined, the increasingly obvious phenomenon of market segmentation needs also led to large auctions in the spring auction this year, a sharp decline.

>> Fall shoots will be comparable to the spring auction. The performance of this year's autumn shoot will be how it will fall in two successive auction seasons. Xi Mu forecasted that it would be held flat in the spring of this year and that the annual art auction market will see a 20%-30% decline year-on-year.

The impact of investor confidence is the main reason for the cold market this spring. There are three main reasons for the lack of investor confidence: First, the international economic trend is still unclear and the sources of investors' funds are not stable; Second, the degree of security of the art market is not high enough, capital is the most concerned about risk, and risk will tend to be low risk for safe-haven demand. Third, the exit mechanism is not perfect, and the liquidity is insufficient. Xi Mu analysis, these factors have greatly inhibited the improvement of the art market demand.

"The market still has sufficient funds, and it is not enough for the rich to enter. This year's autumn auction will have a flat trend with the spring auction."

Specific to each sector, Xi Mu analysis, Chinese traditional painting and other sectors of the painting and calligraphy is still relatively defensive, strong mobility, high level of awareness also makes the traditional plate more competitive advantage, such as Qi Baishi, Li Ke dyes and other classic works, there will still be high prices . In contrast, buyers tend to be cautious when the market is blurred, and they wait for the variety to wait and see if the trend of different emerging sectors is not good in the short term.

>> Market Avoids Structural Collapse Mainland art auction market has gone through 20 years, but chaos continues. Xi Mu analyzed that in the fragile market structure, too rapid growth is easy to form a large-scale collapse, and the current market is more like building on the sand and forming a market at the expense of market order.

According to Xi Mu’s analysis, the double operation of the Chinese art market did not change the quality of the Chinese art market, but it caused many problems to accumulate. The chaotic phenomena in the market such as authenticity problems, lack of credibility mechanisms, problems in the development of market systems, and lack of supporting systems for evaluation and appraisal have not only failed to achieve effective governance, but have also been magnified along with the market's double heights. Today, the problem has become more serious. This is also the inevitable result of the lack of supervision after the market has developed to a certain extent, and it is only necessary to operate on its own.

Although the current art market looks like the sky, but the original market top and bottom structure has not only changed to a good direction, but also made the original serious problems have become more prominent, structural problems have been continuously enlarged and accumulated. However, the structure is not simply to build a framework, but also need a certain way.

“The top-level design work must be carried out on the basis of fully understanding and mastering the laws of market development. The simple and crude type of one-size-fits-all management is based on the idea of ​​pursuing order at the expense of development and stifling the creativity of the market through the guise of governance. It is a kind of blindness and ambition, and the damage to the market is profound and far-reaching."

Xi Mu suggested that to promote the sound development of the market, or the need for government supervision and management, this is not a short time to complete, this is a systematic project. "To treat the prevention of the structural collapse of the Chinese art market, we do not have more time and choices. It is the key to relying on continuous innovation to improve the ability of the Chinese art market to achieve sustainable development. This is why we have repeatedly raised the top level. The significance of design and care innovation for the development of the Chinese art market."

>> Investment Suggestions Regional Schools Will Have More Space Today, when the Chinese calligraphy and painting market has stabilized, what else can be overlooked? Xi Mu believes that the school auction will have more room for market development.

In Chinese calligraphy and painting, modern paintings and calligraphy have performed outstandingly. The most eye-catching of them is the famous masterpieces of the six major schools, namely “Beijing-Tsinghua School”, “Maritime School”, “Jinling School”, “Chang'an School” and “Lingnan Painting”. School and Zhejiang School. At the end of last year, Xi Mu made a market analysis on the painting auction market one by one, and released a report on the analysis of market landscape. Judging from the market performance of this year, the regional market has developed rapidly, and each school has achieved a good record.

“According to the development trend in recent years, the price of Chang’an School of Painting and the scale of market expansion have reached a relatively high market state, which is most prominent in the market performance of the major painters. The growth of the regional market has its own characteristics and Advantages, and local auction companies can easily turn the advantages of art into a market advantage. Now that each painting school is not a separate collector's market, the auction market is influxed very quickly."

Xi Mu analysis, other school will gradually turn active, but this kind of excavation needs combing, academic research, as well as the re-excavation of the history of art, the re-analysis of the value structure, on these foundations, the school can be in the auction market. Get a place and produce healthy development.