Investing in Chinese porcelain & works of art can be very profitable, but be sure to know what you are buying is of good quality – and genuine! There is a lot of fake items on the market.
The entire global market for Chinese artworks totaled US$8.5 billion in 2013, some 28% of the value of total sales of art and antiques auctioned around the world, with mainland China accounting for 70% of the total.
Within this sector, the highest average prices were found in older period pieces, reflecting a strong cultural focus in China, as well as limited supply.
The wealth, limited supply, and economic dynamics within China all point to a solid outlook for long-term growth in the Chinese art & antiques market.
The chart below shows the distribution of fine art auction sales revenue worldwide in 2016 by country.
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- A big plus for many investors is the fact that you control the asset. It is in your care, not in the hands of an investment firm. Many people have a hard time trusting others with their investments, especially when wrongdoings and fraud investigations consistently make front page news. An art investment is all yours – the management, care, and storage are your responsibility.
- More Chinese antiques cannot be made. The fixed supply and the rising amount of people who can afford high-end antiques (more demand) means the price for Chinese antiques is expected to continue to rise.
- Art and antiques are tangible investments that can be visually enjoyed while they create a monetary profit for those collectors who are willing to hold onto their pieces during the time their value gradually increases.
- Collectors understand that they are buying a treasure to pass down to other generations and they know that the value is increasing. Art pieces are not correlated to stock prices or commodities like gold, and finding unique and promising pieces can be exciting.
- You might not get much day-to-day enjoyment out of your stocks or shares, but a pieces of Chinese antique porcelain can please every time you look at it.
- Chinese citizens are eager antique collectors. There were 260 museums in Shanghai in 2012, a whopping increase to 385 in 2015. The number of museum visitors reached 69 billion in 2013 from 26 billion in 2012, which hints at a growing population of potential collectors.
- New categories of collectors, headed by corporate collections and young collectors, have entered the market leading to a growth of fresh blood and new funds within the Chinese antiques market.
Unlike stocks, whose underlying companies reflect a volatile price, Chinese porcelain & works of art usually appreciates steadily with time. If you have chosen the pieces in your collection wisely, sometime down the road your Chinese antique is likely to be worth considerably more than what you paid for it.
- We all know what a roller coaster ride financial markets can be. However, stock market corrections, volatility, and other financial fluctuations are nonexistent in the antiques world. This is seen as one of the biggest advantages to investing in Chinese antiques. The collector can sleep peacefully at night, without the worries that plague other investors.
- The number of arts in the high-end market (which sold for more than ¥50 million) grew by more than 200% because high-earning Chinese consumers are more willing to invest in and collect Chinese art & antiques as their incomes continue to soar.
The chart below shows the potential investment scale of Chinese citizens with high net assets.