On the evening of May 30th, RDCY Seminar Series was held in Chongyang Institute for Financial Studies at Renmin University of China (RDCY). Professor Huang Jun, deputy director of China Art Financial Institute at Renmin University of China, delivered a lecture interpreting the artwork and financial development in the view of modern era. She pointed out that the investing and collecting arts is originally a lifestyle.
Professor Huang analyzed the development of art finance from four aspects: overview of the art market, development of the consumer market, returns and risks of the investment, art finance and wealth management.
She pointed out that the art center, fashion center and financial center are highly unified. From a global perspective, the four cities, New York, London, Beijing, and Hong Kong account for more than 80% of the global art market share, while other places account for less than 20%. Moreover, in East Asia, the art market for young people basically accounts for 80% of the market share of art, and people will directly feel the strong attraction power of this vitality in East Asia to Europe and the United States.
Professor Huang Jun also introduced the internal operating mechanism of the art financial center, and elaborated the pricing rules from the economic theory with examples of auction companies, such as Sotheby, Christie, and Ellsworth.
Professor Huang pointed out that China’s entire art market has grown fast in the last 20 years, and by 2011, China has become the world’s largest art market. However, it has started to retreat in recent years because of the excessive increase. The current global market shows that the world’s three major art markets, China, the United States, and the United Kingdom, take the first place in turn.
Although art is a personalized niche pursuit, design is for the public. Excellent design makes us feel better about life. With the rapid growth of the spiritual and cultural demands of the Chinese people, especially the younger generation`s increasing interest in life, the Chinese art market is also full of youthful vitality. Groups such as 80s, 90s, and 00s are more willing to enter the art market and integrate design and art into their own lives.
Returns on investment of art is volatile, and it is a high-risk and high-yield asset. The difference between art investment and financial assets is spiritual rewards. When calculating the returns on art, it is necessary to include spiritual gains, which is difficult to interpret with mainstream economics and other theories. Therefore, art investment is more suitable for asset allocation. The return on asset portfolio will increase, and the risk will drop.
Professor Huang pointed out that financial institutions, customers, and experts of artworks constitute a trilateral interaction of art finance, and they play a major role for the prosperity and regulation of the art market. Then she shared financial knowledge about wealth management of artworks from the perspectives of art mortgage loans, art banks, art funds, art insurance and other aspects.