Weiran Chen

Date of Award

2024

Document Type

Thesis - Restricted Access (SIA Only)

Degree Name

Master of Arts (MA)

Department

Art Business

First Advisor

Brendan Burns

Second Advisor

Judith Prowda

Abstract

China's art market has experienced a remarkable transformation in the past 70 years, evolving from a relatively modest domestic market into a vast empire. The growth can be seen in the Art Basel and UBS Art Market Repost, as China continuously gaining more market shares in the past two decades. The rise of China’s art market is indivisible to the establishment of its flourishing art trading centers: Hong Kong, Shanghai, and Beijing. Out of these, Hong Kong and Shanghai stand out as China's primary international art trading cities. Hong Kong, as a gateway to the mainland market, has long been considered the center ans main focus of China’s art market. Shanghai, on the other hand, has been developing rapidly since early 2000s, making it a powerful competitor to Hong Kong as China’s next international art trading center. However, the outbreak of the COVID-19 pandemic in the late 2019 has completely changed the scene both internationally and domestically. The Chinese government took unprecedented measures towards the crisis. While its actions effectively contained the virus's spread scross the nation, the country’s economy was also damaged in the first quarter of 2020. Lockdowns and quarantine disrupted business operations, with many companies were forced to stop their production. A significant portion of the manufacturing workforce, primarily migrant workers, were trapped in their hometowns, unable to return to their jobs. Faced with lockdown measures and increasing uncertainties regarding health and employment, consumers’ confidence towards the market dropped. Consequently, China's Gross Domestic Product (GDP) declined by 6.8% year-on-year in the first quarter of 2020, marking the first negative growth since records began in 1992. There were significant downturns in industrial production, retail, and investments. The labor market was severely impacted, with the urban unemployment rate 4 soaring to 6.2% in February 2020, a full percentage point higher than the year-end figure in 2019. (National Bureau of Statistics of China 2020) The art market was no exception to the disruptions and challenge. According to the 2023 Art Basel Report, China’s global market share in value has dropped significantly, the sales declined by 14% to $11.2 billion, making the market share decrease from 20% in 2021 to 17% in 2022 (McAndrew 2023). In this context, Shanghai and Hong Kong, as renowned cultural and financial centers in the Asian art scene, were not immune to the effect, which leads to a reevaluation of their respective art markets. Prior to the pandemic, both Shanghai and Hong Kong boasted thriving art markets. However, the market was striked by the global recession brought by the pandemic. Moreover, the followed policies enforced by the country’s government forced the art market to furthur adapt and evolve in the face of unprecedented challenges including lockdowns, postponement of major auction sales in the autumn season, and cancellations of art fairs due to the strict measures posed by the government. This thesis aims to provide a comprehensive comparative analysis of the art markets in Shanghai and Hong Kong, focusing specifically on the influence of the pandemic on the two cities’ role in the Asian art market. I will exploring the impact of the pandemic to the two cities using the PEST analysis model. This study seeks to analysis the art market performance of Shanghai and Hong Kong post pandemic, study the influence of the pandemic on the two cities, and examine how it would affect the two cities’ significance in the scale of Asian art market.

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