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HomeNews【Feature - Market】European, US and Asian art markets reacted differently in the past crises.

【Feature - Market】European, US and Asian art markets reacted differently in the past crises.

We have to accept the general condition, yet there’s still way to crest success from a micro perspective.

Half of 2020 has already slipped away. The global economy is about to enter the annual second half, and the control of COVID-19 has gradually been strengthened. Major auction houses are gearing up for the long-delayed spring auctions, since the freezing winter will eventually pass. In the rest of 2020, how is the global art going? With review and reflection, ArtPro will continue to gather experiences from the global economic crisis. After our previous【Features – Opening】, we plan to take market as our perspective, and explore how Europe, America and Asia have gone through the storm and turbulence in the past, hoping to inspire the current global art market.

Part I: Where are the opportunities in the European and American Markets in the teeth of the storm?

一、European and American Market bear the forefront brunt of Turnover Ups and Downs

Overall, the top half of the graph represents the price index of Europe, America and Asia, while the bottom half shows the total turnover lines. Three lines go up and down, reflecting the fierce competition and rivalry of the market. The financial crisis in 2008 has brought extraordinary turbulence to Europe, America and Asia, as we can see from both the price index and the total turnover. From the price index, the soaring figures of Asian price index shall serve as a good comparison against the relatively low figures of Europe and America in 2008. Again, now a sign of decline reappears.

European, American and Asian Price Index and Total Turnover

The total turnover indicates that American art market has suffered the brunt and experienced a downward trend since 2007, as it’s the “epicenter” of the 2008 financial crisis. Due to the time difference in spreading and the market lag, the European downward trend appeared in 2008. After suffering two-year’s consecutive low level of total turnover, the global market did not recover until 2010. Confronting crisis, Europe and America show linkage in ups and downs, which is inseparable from their close and inextricable market relations.

二、Stable Classical Artists and Prominent Modern and Contemporary Artists in Later Period

The red lines below is the price index of classic European and American artists represent by Pablo Picassoand Claude Monet , while yellow line is the price index of modern and contemporary European and American artists represent byJean-Michel Basquiat,Peter Doig. These are important references manifesting the changing price levels of European and American artists. By comparing ArtPro100 and S&P500, the competition and fluctuation between European and American classic artists and contemporary artists shall clearly show the market performance and trend of artists in certain region as the global economy fluctuates.

European and American Classics tend to be stable, Modern and Contemporary Artists beat the Index

It can be seen directly from the graph that the lines of classic and modern and contemporary go downwards in 2008 crisis, and both experience a stable stage of recovery afterwards. While the old masters own a relatively mature market and their price level tends to be stable, the modern and contemporary artists’ value is in constant development with a large growth space in the market. The two gradually differs and opens a gap in increasing speed – the price index of modern and contemporary artists is getting higher and higher, greatly outperforming S&P500 and ArtPro100.

1. European and American Classic Artists: Personalized Market Trends Vary from Person to Person

The world’s classic artists’ market performances differ from person to person, and that’s the fun part of art investment exploring value range in changes. Claude Monet experiences a synchronous decline in S&P500 and ArtPro100 during the 2008 crisis, but the later growth is satisfactory; Marc Chagall achieves a good mark at the beginning, but is overtaken and left behind by S&P500 in later stage.

Claude Monet (surpasses both S&P500 and ArtPro100 )
Marc Chagall (exceeds S&P500 in early stage, and obviously declines later)

Despite that the classic artists have the advantage of a stable market, yet their price index still fluctuates with the overall environment. For a long time Vincent Van Gogh’s price index is lower than ArtPro100 and S&P500, but it surpasses the former two after 2014. We can tell that under the law of the market, any success is zigzag upward.

Vincent Van Gogh (stays low at the beginning, and turns the tide later)

2. European and American Modern and Contemporary Artists: Burst Potential Brings almost 10 times Rise

While the classic artists drive stable, the modern and contemporary artists as the latecomers are also quite brilliant. Artists like Jean-Michel BasquiatGünther Förg all show their steady resilience against the 2008 crisis. By 2019, the price index of these modern and contemporary artists has increased by about 10 times, bringing a promising future.

Jean-Michel Basquiat increases by 9 times
Peter Doig increases by 10 times
Günther Förg increases by 10 times

Part II、Asia, a Rising Star in the Crisis! Among the Domestic Artists, who will take the Lead?

The 2008 economic crisis has not weakened Asia. On the contrary, it promotes the rise of Asian price index, which soars all the way up, and continues to rise today. Its capability of self-adjustment and economic resilience shall not be underestimated.

一、Flourishing Asian Artists with Up-rising Modern and Contemporary Stars

Due to regional divergences and market personalization, the trend of Asian market differs from that of the European and American markets. The Asian Artists all flourish. No matter experienced old masters in painting and calligraphy field, or latecomers in modern and contemporary art, there is no drastic downward trend. The two forces together support Asia market to win a place on the international stage.

Stable Asian Painting and Calligraphy Market and Hot Modern and Contemporary Art

Asian calligraphy and painting stably resisted the 2008 economic storm, and went in to a soaring stage after the crisis, with the price index is relatively stable over the past 10 years. The modern and contemporary art witnessed a slight fluctuate in 2008, and ushered a synchronous growth with Asian painting and calligraphy. Yet as the latter goes stable, modern and contemporary price index is still rising rapidly, with eye-catching speed and irresistible impetus. (In the graph below, the green line refers to Asian painting and calligraphy represented by Zhang Daqian, and the purple line refers to Asian modern and contemporary art represented by Zao Wou-Ki – a crucial reference of the price index change of the Asian artists.)

1. Hot Asian modern and contemporary art with soaring price index

With the rise of Asian auction market, Asian modern and contemporary artists are attracting increasing attention from the international art circle. “Zao Wou-Ki fever” has been a hot fashion pursued by collectors. Despite a slight fluctuate, yet his price index is in an overall upward trend. The steady and stable market trend deserves the title of “the leader of the auction field”. Yoshitomo Nara started later than Zao Wou-Ki, began to rise rapidly since 2018, and became “the most expensive in Japan” in 2019, with a splendid future lies ahead.

Yoshitomo Nara increased by 17 times、 Zao Wou-Ki increases by 8 times

On the whole, Zao Wou-Ki and Yoshitomo Nara all largely surpass S&P500 and ArtPro100, with impressive performance.

Sanyu increases by 7 times

2. Chinese Calligraphy and Painting Promotes a Unique Asian Art Market Different from that in Europe and America

Driven by mainland China, Asian market presents uniqueness different from the European and American market. As an art category that cannot be neglected in the Asian market, Chinese painting and calligraphy has always occupied an essential position, and has considerable power to resist the crisis. The well-known names as Qi Baishi, and Zhang Daqian all enjoy a wide range of appreciators and large numbers of works on auction list, and therefore keep constant heat in the market. In the market fluctuates, calligraphy and painting artists have shown extraordinary ability to resist the crisis.

Zhang Daqian (surpasses both S&P500 and ArtPro100)

二、Asian Rising Stars Contribute to a Tripartite World Art Market

Before 2008 financial crisis, Europe and America dominated the global art market. Asia began to rise during the crisis and increased rapidly after 2008 -- from less than 10% up to 40%, its market share surpassed Europe and America and became the world’s No.1. As Europe and America regained economic stability, the Asian market share dropped a little, but the situation of that Europe and America divide up the market has quietly replaced by a tripartite confrontation. Within the international atmosphere, Asia is not only influenced by the external European and American environment but largely driven by internal market as well, which establishes a foundation for the stability and take-off of the Asian art market.

The market share of each continental market before and after the crisis

三、Regional Distribution of World’s Top 100: American Early Lead, Asian Posterior Up

Among world Top100 before 2008, European and American took the absolute advantage, while the Asian auction items only occupied a tiny proportion. In 2009, the number of Asian lots increased rapidly, and achieved the first peak in 2011. In 2016, as the number of European and American lots declined simultaneously, Asian artworks performed well and witnessed a second growth peak, and today it is still on the rise.

The number of Top100 distributed in Europe, America and Asia

The market is constantly changing. It not only may disobey your expectation, but may throw several black swans off guard as well. Thus we have to accept the overall condition, and crest success from micro perspective. Confronting a global turbulence of the art market, we shall seize the opportunity to ride the tides. Under crisis, what kind of art works should art lovers and investors focus on? What kind of auction item owns the ability to resist the risks? When will you get the most out of it? As the art market closes a door in the face of the recession, ArtPro is going to open a window for you in our next feature [【Feature - Returns】Capture the bottom value range, and focus on the star lots with excessive returns].

PS:

The European and American classic, modern and contemporary artists and Asian calligraphy and painting and modern and contemporary artists mentioned in our feature are sample artists selected according to market data over the years, which are representative and professional to a certain extend. Among them, the European and American classic artists include: Pablo Picasso, Claude Monet, Henri Matisse, Andy Warhol, Vincent Van Gogh, Francis Bacon, Marc Chagall, Joan Miro, Alberto Giacometti, René Magritte. European and American modern and contemporary artists include: Damien Hirst, Peter Doig, Gerhard Richter, Jeff Koons, Jean Dubuffet, Günther Förg, Jean-Michel Basquiat, David Hockney, Christopher Wool, Jackson Pollock. Asian calligraphy and painting artists include: Qi Baishi, Zhang Daqian, Xu Beihong, Lin Fengmian, Fu Baoshi, Li Keran, Pan Tianshou, Huang Binhong, Lu Yanshao, Wu Changshuo. Asian modern and contemporary artists include: Wu Guanzhong, Kim Whan Ki, Yoshitomo Nara, Yayoi Kusama, Zao Wou-Ki, San Yu, Chu Teh-Chun, Zhou Chunya, Zeng Fanzhi, Takashi Murakami.




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