China Overtakes UK Art Market

It has been widely reported in the press this week that China has overtaken the UK as the second largest art market in the world. There appears to be a great deal of hand-wringing and whinging too, mainly aimed at the increase in duty (the resale levy, droit de suite) payable on art sold in the European market introduced in 2006.

Currently this levy is payable only on the work of living artists, although an extension is planned to cover the work of artists who have died in the past seventy years, for the benefit of their living relatives. This extension will bring some of the big names of twentieth century art, such as Picasso, into the levy period.

The complainers point out that, although Europe has introduced the levy, the USA, Switzerland and China are not intending to do so and they seem to be predicting a further decline of the UK’s position in the future, due to this lack of an agreed worldwide policy.

It’s nonsense.

China is an emerging economy with a population of 1.3 billion people, all born to be collectors. Every year thousands of Chinese millionaires are being created and they all want to buy and collect art and antiques, particularly Chinese art and antiques.

A quick scan of Chinese art and antiques sold in major auction rooms in London, New York, Paris, Zurich and almost any other city outside of China or Hong Kong during the past ten years will yield a long list of pieces that have subsequently been sold for considerably more in Hong Kong. It is not unusual for a Chinese piece to be sold in one of the major rooms in London in the spring, only to turn up in Hong Kong in the autumn. And now the Chinese are buying art across the board, from wine to old master paintings. Obviously vendors want to sell in China.

Here, in the UK, the market has been declining for years because young people don’t want to collect art and antiques. The youth of the UK are interested in vintage and retro and Ikea. The recession has only made matters worse.

Any extra taxes or levies added to the cost of art will certainly encourage professional dealers and savvy vendors to utilise cheaper options in states not signed-up to the scheme. But, the average non-trade seller will still continue to wander into the first auction house they come to and offer their treasures for sale oblivious to commissions or levies. And the majority of collectors will follow their obsession, wherever it leads them, regardless of cost, as they always have.

I assume that much of the anti art levy rhetoric has been stirred up by the auction houses, who fear diminishing sales in their European rooms. These are the same companies who take hefty bites out of both sides of the sale of every lot in their catalogues. Who exactly are they representing? And why are they allowed to continue this practice, when solicitors and estate agents are, quite rightly, not allowed to do so? Never mind auction houses fixing the rates, that’s small potatoes compared to the utterly immoral position they have been allowed to exploit as the “honest” broker, without oversight. I for one, will not be crying for our major, “respected” auction houses and will continue to avoid their services whenever possible.

It seems likely that this current blow to the UK art market is only the beginning.

By Sam Trader – Visit Cathay Trader

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