The current China crisis aside (ultimately because China is a hybrid animal that will always bounce back), China is set to become one of the world’s biggest overseas investors by 2020 with an estimated investment of $20 trillion. Trillion. A newly married couple today would be looking at a world dominated by Chinese investment by the time their child is approaching primary school.
At present, over 71% of China’s overseas investments lie in energy, transport and metals. This comes as no surprise as China’s rapidly expanding economy is largely due to its construction and industry. Next in line at over 25% is China’s investment in property, finance, agriculture and technology. Again, no surprise – any young professional struggling to get onto the property ladder in the UK will be well aware of the Russian, Arabic and Chinese investors who are winning the property race. Despise this? Yes. Are there advantages? Yes! Read on. The remaining 4% of China’s overseas investment is in what would be classified as “alternative investments”. It is within this diet portion slice of 4% that Art is featured. But - things are changing, and China is gradually paying more attention to investment in arts and entertainment. In short, this 4% is set to rise.
A decade ago, Asia accounted for just 5% of Sotheby's global art sales. By 2013, Asia accounted for over one third. Alongside this growth, the global art market has boomed, with sales in 2014 reaching a jaw dropping £37 billion, equating to a 7% year on year increase (this is extremely good!). Despite investors being warned off 'alternative investments' such as art, luxury cars and wine, China's desire to spend its moolah overseas on arts and entertainment has not waned. A conference held in 2014 by the ACFPU saw top officials from Chinese real estate companies, top designers and architects meet their Western counterparts to discuss opportunities for collaboration and partnership. Wang Jianlin (Chair of China's largest property company, Dalian Wanda), has also made no secret about his intention for apportioning $1 billion of his wealth in the UK entertainment industry. Already a 20% stakeholder in Spanish football club Atletico Madrid, Wang has advocated the UK's open market and welcoming approach to foreign investment. Wang is but one example of China viewing the UK as China's favourite place in Europe to invest, and it is crucial that the Art industry in the UK pounce on this opportunity with the same zeal and passion that China itself will use to bounce back from its current economic crisis.
So next time you hear discussions about global investments in Art, rather than asking 'What about Art?', the statement should be: 'Just wait until you see what happens in Art'.