Art wealth management is an emerging business in China. In recent years, it has been occurring more regularly among Chinese high-net-worth individuals (HNWIs), who have become increasingly keen to buy and collect artworks as an alternative asset. In this context, China International Capital Corporation Limited (CICC) and the School of Arts Administration and Education at the China Academy of Fine Arts (CAFA) are officially set to present the first edition of China’s Art & Wealth White Paper this year. Backed by the Art Market Research Center (AMRC), the White Paper conducts surveys with 2280 industry participants and features insights written by 14 China-related art market or art wealth management experts to offer an in-depth view of the trends and characteristics of the emerging art wealth management business in China.
KEY FINDINGS
High confidence in the short-term future of Chinese art market
Both HNWIs and art market professionals who participated in the survey showed a high degree of confidence in the art market. Overall, 31.18% of the respondents believe that the art market will follow the economic climate in the next three years, and 47.54% believe that the development of the art market will exceed the economics and show a better performance.
Art has become one of the top choices for HNWI alternative assets
As an alternative asset, art has become increasingly popular. In 2019, 48.60% of those surveyed were optimistic about art as an investment target, which is second only to private equity funds (48.86%), and exceeds the more common gold investment (48.20%). In contrast, real estate investment has cooled, with 34.25% of those surveyed optimistic about this category.
47.89% of the respondents believe that art as a viable asset class will be incorporated into wealth management
47.89% of those surveyed recognized art as an asset class in wealth management. Only 23% believe it is not suitable for China at this stage. 75.09% see authentication and evaluation as one of the main hurdles to incorporating art into wealth management. Other main hurdles include the lack of qualified professionals (69.04%) and low market transparency (63.25%).
Strong financial motivations behind art collection
According to the 2019 survey, financial returns ranked first in the motivations for art collection, 56.84% of the respondents considering it essential, and 47.60% are attracted to its emotional value. Other major motivations include family inheritance (42.89%).
Among all art wealth management service/product, art evaluation is the most popular
60.48% of the respondents say that they pay would choose art evaluation over other art wealth management services/products. Second is art investment (50.18%). Collection management received attention from 43.46% of those surveyed.
LAUNCH SEMINAR
The China’s Art & Wealth White Paper 2019 was launched at CAFA, Beijing on October 28.
Wu Bo, director of the CICC Wealth Management department, pointed out that “art wealth is a key means through which better taste has been developed, and that it will assist in the realization of individual social worth. The publication of the report applies both a rigorous, scholarly attitude and the spirit of practice towards art wealth management to an in-depth, multi-faceted analysis.”
▲Wu Bo, principal of the CICC Wealth Management department
“Through a one-year cooperation, we have nurtured a close connection between the School of Arts Administration and Education at CAFA and CICC Wealth Management, offering an important communication platform for art and finance scholars and practitioners,” said Dr. Zhao Li, vice president of the School of Arts Administration and Education at CAFA. In addition, Zhao added that the White Paper is only the beginning, and he hopes to see much more new potential in the coming years.
▲Professor Zhao Li, vice president of the School of Arts Administration and Education at CAFA
Ray Dong, director of the AMRC and founder of Art Market Journal began his speech with a brief description of the paper’s contents. China’s Art & Wealth White Paper 2019 provides an in-depth look at four main sections: art as an emerging part of wealth management; opportunities and challenges of art wealth management; modes and status quo of domestic art wealth management; and future trends of the art wealth management business. According to Dong, so far Chinese art wealth management has been involved with six major product/service schemes, which include an art investment fund, an art-secured loan, art banking, an art tariff-free zone, family trust, and art wealth management consulting.
▲Ray Dong, director of the AMRC
