The Future of Art & Finance in China
We were very honoured to be invited as keynote speakers to the 3rd annual Asia Art & Finance Forum, organised by Asia Institute of Art & Finance (AIAF) in Shanghai, China, on March 28, 2018. The forum discussed and shared the theme of The Business Model and Innovation of Art Finance in order to discuss the development trends both in China and abroad, and promoted the cross-border development of the domestic art finance industry.
Asia Art & Finance Forum (The 3rd Edition)
Asia Institute of Art & Finance, the organiser of this Forum is an independent higher education institute in China (Shanghai) Pilot Free Trade Zone. The institute employs a selection of core educational resources of art & finance worldwide, designed by an international team in the fields of humanities & art, finance & investment and business management, and focuses on senior management education and research. It is the first educational institute dominated by art & finance with both industrial depth and global breadth in Asia-Pacific.
The China Market
“China is showing a burgeoning interest in art and art investment. Artwork is no longer a piece of jewelry in an ivory tower.” said the president of the AIAF in his welcome speech. Art no longer has to be something only for a select few — financial transactions in art have been unlocked. Furthermore, the younger generation is showing a growing interest in Art transactions, trades, and investment.
As China’s economy grows, 2 billionaires are born in China every week, and the number of High Net Worth Individuals (HNWI) has risen by 9 times in the past decade.
These HNWI increasingly are entering the art market in view of asset allocation and preservation of wealth. The average age of the new self-made Asian billionaires is also much younger than their European HNW counterparts.
“In the past, we used to give children candy as a treat, now we tempt them with WiFi. This is a sign of the change of times, and we have to innovate with it.” explained Deputy Director of the Institute of Chinese Art Finance, Huang Jun. “Chinese art investors aren’t so interested in the art itself, but they are very interested in the profit they can make from it.”
This younger generation, accustomed to the ease of the one-click Internet culture, have come to expect the convenience of making electronic transactions. So the market awaits reforms — particularly in the development of art offerings and products.
Art Finance has a very specific window of opportunity in China right now, with a national $230 trillion worth of wealth onshore, HNWI are thinking about wealth preservation and inheritance. In times of adversity, the prices of stocks stay depressed. But the price of art and collectibles keeps climbing. They need a storage of wealth.
“In China on the one hand, we have this huge prosperity, but on the other we have lack of transparency and trust of authenticity. We need a bridge.” To incorporate art into the balance sheet we have to use the tools of finance to monetise artworks, using new FinTech tools.
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