s results as the entire Euro area. As a result, Chinese art market's total turnover reached 210.8 billion yuan (about $34 billion), representing an annual growth rate of 24%, the highest growth in the world art market.
In two consecutive years of 2011 and 2012, China successively overtook the UK's and then the US's position to become the world's biggest and fastest growing market for art and antiques, attracting buyers from all different nations. Latest figures show the global share of China rose to 30% based on both auction and dealer sales (Figure below).
Structure of the art market:
There are five primary participants in today's modern art market. These are the dealer, the critic, the auction house, the museum and the collector. The artist, who is also the physical originator of the art, participates the least over the transfer of one piece of art therefore is not included in the process of art trading. Normally, an art dealer (or a gallerist), who acts as a representative of the artist, introduces a piece of art to the public by setting a price for the artwork. Once it has been purchased in the primary market, it enters the secondary market. An artwork may go through several dealers, or an auction house like Sotheby's or Christie's, before reaching its next buyer. Whilst the dealer and the auction house serve as facilitators of the market, the critic and the museum act as market influencers. With approvals by these industry experts, the demand thus the price for an artist's work typically increases. Ultimately, the art piece is earned by market acquirers, including both private and corporate collectors.
Nowadays, the old system of physical auction rooms is increasingly being replaced by online sales. Some auction companies, including Christie's and Sotheby's, have developed online trading platforms since 2011 which made Chinese art pieces, in particular, easier to purchase by collectors from all around the world.
Factors affecting demand and supply in the art market:
The price commanded for a piece of artwork is largely affected by the demand for the artwork itself. It varies based on the size of the work, the artist's reputation, the popularity of the dealer and the auction house or the message delivered. The demand also depends on the risks and returns associated with the art investments compared with other classes of investments. Moreover, different buyers are willing to pay differently depends on their knowledge, information, preference and valuation on the artwork. Once the price of the work increases, it reinforces the belief among acquirers that that artist is a good investment and will thereby place further upward pressure on demand. Other external forces such as politics and economic growth are also taken into account.
One important feature of the art market is that it is essentially supply-driven, with a limited amount of high quality art being produced by living artists and a limited amount of fine art being sold, each year. Consequently in such market, increased demand cannot necessarily raise supply and, instead, elevates prices, narrowing down the available offer to only extremely wealthy or well-connected collectors.
Role of public institutions and regularly policies:
Confidence in the Chinese contemporary art market looks increasingly fragile as the ArtTactic Chinese Art Market Confi
