BEIJING, September 5, 2023 — CKGSB Professor of Finance Mei Jianping launches the MM Chinese Art Indices, a biannual reference guide that determines the changing dynamics of the Chinese art market by measuring repeat auction sales.
By measuring prices, sentiment, liquidity and artists’ popularity, the Indices offer a scientific, systematic and comparable system on which to evaluate investment decisions regarding Chinese art, a black box to many in the art investment world. Chinese artworks have strong long-term investment value, and are good inflation hedges. With the Indices, investors can apply reason to the valuation of Chinese art, which in turn may help the market grow at a sustainable pace.
The study is based on auction records from Sotheby’s, Christie’s and Phillips, in Beijing, Shanghai, Singapore, Paris, London and New York. With the data from the websites of three major auction houses and artprice.com, an art price database, this study has analyzed a total of 327 artworks by Chinese artists from the Greater China region and overseas that have been repeatedly put up for auction between 1988 to 2022 and saw an average sale rate of 85%.
The Price and Sentiment Indices show just how turbulent the Chinese art market has been since 2000 and how major events, such as the financial crisis, the COVID-19 pandemic and inflation, have impacted the market. The Price Index rose from 1 to 12.8 between 2000 and 2022, a cumulative rise of 11.8 times in 23 years. Yet, the compound annual growth plummeted 25% during the financial crisis in 2008. In Spring 2020, the Sentiment Index fell to -0.45.
The Liquidity Index quantifies the liquidity score of Chinese artists’ works through years on auction, turnover and liquidity. It has found that artworks by Wu Guanzhong, Zao Wou-ki and Sanyu are the most liquidated.
The Artist Popularity Index measures the market performance of repeatedly auctioned individual works of selected well-known artists. It has found Xu Bing tops the ranking by outperforming the market by an average of 22% annually.
The biannual MM Chinese Art Indices are co-developed by CKGSB Professor Mei Jiangping; Michael Moses, a retired professor at New York University; and Jiang Guolin, a retired researcher at the Shanghai Academy of Social Sciences.