Chinese Art Market Is Overheated
Chinese Art market is overheated
Behavioral Finance
Advisor: Randall Mark
Mengchi Zhang
ID:0569144
Abstraction
In china the economy have a lot of bubbles, for example, the real estate bubble, which has been hot discussed, but few people care about another bubble: The art bubble, in recent year fine art consumptions in China are very irrational, for example, according to the website of Theatlantic (2011) , China has already surpassed the United States to the economic number. Not the GDP. Its art market. Only four years ago, China is the worlds fourth-biggest fine art consumption country. Now it past the United Stated becomes the worlds largest auction market for art. The reason why China has art bubbles will be discussed in this paper.

China’s fast growing economy drive fine art market growing.
A country or regions economic growing, often drive the consumption of local artwork. But usually the artwork consumption growth rate and economic growth rate is different, often realized as consumption of art is growing faster than economic growth. Moreover, the Japan 1990s asset bubble also creates art bubble. Between the years 1987 to 1990, Japanese purchased a lot of Western art. Japanese tourists became an ever-present fixture in the high-end auction houses, art galleries and luxury boutiques of cities like New York and London. Because from 1970 to 1990. The Japanese economy was increasing very fast. Also in China, China’s fast growing economy and Chinese people’s income increasing encourage them to buy more fine art.

Chinese economy unreal growing heating the art market
Although Chinese economy seems to be perfumed well, actually in real economy growing is not that much, in china people more focus on speculation but not real economy such as agriculture, manufacturing and services industry, although china’s whole economy is increasing, but the weather of real economy is getting worse, according chart below from the HSBC (2014) , the Chinese PMI trend to be decreasing from 2006 to 2014, that means in manufacturing is becoming harder to earning profit;

But the official data shows china still have strong growing which more than 7%, I think the reason is that china fictitious economy growing a lot, people more focus more price increasing but not creating value. These specular don’t interesting in how many intrinsic values artworks have and the only thing they care about is the price, they use their capital flow into

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Chinese Art Market And Recent Year. (July 7, 2021). Retrieved from https://www.freeessays.education/chinese-art-market-and-recent-year-essay/