The world's second-largest fine art market by auction turnover has restructured to cope with a pile of unsold works but prices fetched can still impress, a study of local trends shows.

The pile of unsold artworks in China fell last year, with the fine art market generating $5.4 billion in auctions, just behind the $5.9 billion level recorded in the US. There are signs that the China market is restructuring after scorching growth rates, according to artprtice.com.

Auction turnover in the US rose by 18 per cent during 2018. By contrast China’s total turnover shrank by 12 per cent, reflecting a restructuring process that started in 2015. China’s auction operators focus among other initiatives on cutting unsold rates. Still high, China’s nationwide unsold rate fell from 64 per cent in 2017 to 54 per cent in 2018, the publication said.

“The slowdown in the Chinese Art Market has not, however, prevented it from generating a number of very impressive results, which prove that buyers have not lost confidence. Above all, these strong results show that major collectors are increasingly active in the market,” the publication continued. 

It cited the case of the $16.4 million paid at Poly International for an oil painting by WU Guanzhong (1919-2010), titled Two swallows. The work was the only oil painting to have fetched over $10 million in mainland China during 2018. (The sale took place in Beijing last December.)

“The Chinese market is also expanding geographically with four major poles each contributing to country’s art market: Beijing first (45 per cent), followed by Hong Kong (29 per cent), Shanghai (7 per cent) and Guangzhou (6.7 per cent). 

The publication noted that Western auction giants such as Christie’s, Sotheby’s and Phillips have managed to set up in Hong Kong, but the Chinese auction houses “reign over the mainland”.