Chinese spending on art and antiques shrank by nearly a quarter in 2012, ending a streak of spectacular growth that helped drive up global prices and made China the biggest player in the market by 2011, a report said on Thursday.
The study, commissioned by the European Fine Art Foundation which organizes The European Fine Art Fair (TEFAF), estimated the worldwide art and antiques market contracted by seven percent last year to 43 billion euros ($56 billion).
The study, compiled by academic Clare McAndrew, founder of the consulting firm Arts Economics, estimated Chinese art sales fell 24 percent to 10.6 billion euros in 2012.
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Auction sales in China dropped an even steeper 30 percent, pushing it into second place in the art market rankings with a 25 percent share behind the United States, which regained its position as market leader with 33 percent.
Britain remained the world's third most important art market at 23 percent, according to the study released to coincide with this year's TEFAF which opens in Maastricht on March 15.
"The main reasons for the deceleration in (Chinese) growth were both demand factors (including a slowdown in economic growth and continuing liquidity constraints) and a reduced amount of high quality, high priced works coming onto the market," said the report.
"Many art funds and other speculative investors also reduced their participation in the market during the year."
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The study added that collectors were increasingly focusing on works by so-called "blue chip" artists.
"Many art buyers are minimizing risk by opting for the best-known artists at the top end of the market with post-war and contemporary art performing strongly," it said.
That helped boost auction sales of post-war and contemporary art by five percent in 2012 to almost 4.5 billion euros and took that sector's overall market share to 43 percent.
Modern art was the next biggest sector with auction sales of 3.2 billion euros, representing 30 percent of the fine art auction market but a fall of 17 percent from its 2011 peak of 3.8 billion.
Private retail and dealer sales, as opposed to the auction room, fell four percent to 22.2 billion euros, with the lower end of the market recording the weakest performance.
Several art analysts have voiced concerns over what they say is a growing divide between the top end of the market, where ultra-wealthy buyers snap up rare treasures for staggering sums, and mid- to lower-tier sales which have been more susceptible to broader economic pressures.