Chinese Financial Crisis Could Affect Art Market;counterfeit artworks on Chinese market

China is currently experiencing a major share market crisis and the Shanghai Composite Exchange has reached its lowest point in eight years, as the art market has observed with much trepidation. In June, the Shanghai Composite Exchange dipped 30%. The situation has caused quite a buzz in the art world. On 28 July, Alexander Forbes raised the alarm in an article in Artsy.

So what is Forbes worried about? That the situation could resemble the 1989 crash in Japan. Prior to 1989, Japanese collectors were spending a fortune on impressionist masterpieces, but the financial crisis of the late-1980s resulted in art prices dropping 80-90%. Collectors withdrew en masse. As Forbes recalls, the art market experienced a historic decline, especially in the impressionist and modern sectors, and the financial specialist believes that the situation could be similar in China, especially since Chinese collectors are very active in the market at the moment. According to an Artnet study, sales are down 30-40% in China.

This point of view has been widely discussed and nuanced over the past few days. CNBC explains that the decline mostly concerns Chinese art sold inside China and has not so far affected Western art, which wealthy collectors buy for the prestige. Monets and Picassos should continue to sell like hot potatoes, and, Christie’s has in fact stated that big sales have even increased by 47%.

When interviewed by the CNBC, art sales consultant Suzanne Gyorgy said that the market’s decline is primarily caused by collectors’ disinterest in Chinese art, rather than a general collapse as in the late-1980s. She explained that at the time, the market was far smaller and the Japanese had a monopoly over the market. Today, other regions, such as South American and the Middle East should help to stabilize the situation.

The next sales will be decisive to see if the market really is affected by the Chinese financial crisis.

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Chinese art market disrupted by counterfeit artworks
On the chinese art market, the second biggest art market worldwide, copies and forgeries are common. According to an article published a few days ago in Le Journal des Arts, Qi Baishi, the modern Chinese artist, whose painting is believed to have been sold for €46.5 million in May 2011 at China Guardian in Beijing, is the most frequently copied and forged artist. Over twice as many works as those believed to have been produced by the artist who passed away in 1957 are sold by auction. And with reason. The growing appetite of Chinese collectors who are prepared to pay highly for works by their great masters is making more than one crook lick their lips. As the New York Times says, late at night on Chinese television there are ads promising quick gains for people who are foresighted enough to buy a collection of works by disciples of the great masters for a mere $2,500. Buy today and you will be sure to make a $100,000 profit tomorrow, or so the ad says.