Chinese fine art feels the pinch

TEFAF's research focuses on galleries and dealers, rather than just auctioneers, covering the performance of fine art, antiques and decorative art. It pays particular attention to the burgeoning art scenes in China and Brazil in 2012.

TEFAF's figures show that against the backdrop of a continued slowdown in economic growth, world art sales contracted by 7 percent to 43 billion euros ($55.6 billion) last year.

China played a key role in the decline, whose sales at auction and in the retail business fell 24 percent. The US market achieved an increase of 5 percent.

Both Artprice and TEFAF attribute a decelerating Chinese market to fewer high-quality items by blue-chip artists, even though auction houses have combed the world looking for such works. Reduced activity from art funds and trusts has also contributed to a soaring market performance.

"The Chinese art market has arrived at a bottleneck after nearly 20 years of rapid expansion. It needs to clear many obstacles to move forward," says AMMA's Guan Yu.

"Most artworks are overpriced and no longer have the potential for further growth in value. The market requires a comprehensive regulatory system to curb such malpractices as selling counterfeits and hyped-up marketing."

She says that art galleries are finding it difficult to remain competitive as auction houses develop their business into fresh areas.

She adds that galleries lack favorable tax policies and professionals who are knowledgeable about art, and have management and marketing experience.

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