The art market has relied on a type of reverse asset rotation to maintain its 21st Century levels. In financial markets, asset rotation is cashing out of the gains in one class of presumably now over-valued investment to invest the money in another, under-valued class of asset. In the art market, the asset remains the same Impressionist, Modern and Contemporary art but the buyers rotate. During the 21st Century, Gulf State buyers, Russian and Ukrainians, and Anglo-American financial players from hedge funds and private equity have each said to be driving the market at different times.

With the London sales approaching, all eyes are turning to Chinese buyers to support the art market. Bloomberg‘s Scott Reyburn revealed, in an interview with Christie’s CEO Edward Dolman, the interesting statistic that the value of work bought by Mainland Chinese buyers at Christie’s nearly doubled in 2009 from 2008:

The value bought by mainland Chinese bidders at Christie’s events increased by 94 percent in 2009. […] China will provide an increasing proportion of buyers at Christie’s auctions of 20th-century Western art, said Dolman. “Chinese clients were buying and underbidding Impressionist and modern works in New York in May,” said Dolman. “It’s already happening.” Clients from Greater China (Hong Kong, Taiwan and mainland China) were among the Internet bidders who secured 14 percent of all Christie’s successful lots. Online purchases increased 40 percent on 2008, said the auction house.

The Wall Street Journal‘s Kelly Crow follows up on that with these observations:

“These people are already sophisticated buyers of their own work,” he said, “but they’ve got an international outlook now, and they want the best-known names in art.” Their purchasing power was evident during the last major round of auctions in New York in November, when Asian collectors won several works, including Christie’s $10.7 million Degas ballet scene, “Danseuses,” and Sotheby’s $8.1 million Picasso portrait, “Femme au chapeau vert.”

Christie’s Sees Art Market Recovery After 24% Decline in Sales (Bloomberg)

Chinese Loom As Art Sale Players (Wall Street Journal)