Hong Kong sharpens fine art edge over Singapore
HONG KONG, March 24 (Reuters Breakingviews) - Chinese collectors are piling into Hong Kong for Art Basel this week. That is good news for an industry that saw turnover slow last year thanks to lockdowns and border restrictions. As the financial hub jostles with rival Singapore, its vibrant art market could help it grab a bigger slice of Asia’s wealth management pie.
The Chinese special administrative region claims to be the world's second largest contemporary art auction venue, and it has seen some huge headline sales – as with a landscape by Zhang Daqian that Sotheby’s sold for $47 million last year. Total turnover in China was $4 billion in 2022, according to Artprice. The cream of that crop tends to go on the block in Hong Kong. “We don’t see any rival cities that can compare,” Phillips Asia Chairman Jonathan Crockett told Breakingviews. The three major auction houses Christie’s, Sotheby’s and Phillips are all expanding their office footprints.
Thanks to a combination of political crackdowns and harsh quarantine requirements for international travellers, the city’s attractiveness has dimmed in recent years. There has been an exodus of talent, property prices have fallen and the economy contracted in the last two quarters of 2022. Over the same period Singapore has struggled to digest surging immigration by rich individuals, who are driving up housing prices. But the Lion City also has a reputation for blandness. It doesn’t appear on the top 10 list of art markets in Asia.
Chief Executive John Lee is trying to capitalise on the local art scene. The government is holding a “Wealth for Good” summit on Friday, concurrent with the art fair, to promote the city’s wealth management services and family offices. Local institutions are climbing aboard too. HSBC (HSBA.L), (0005.HK) is offering to give loans to private bank clients using “passion assets” such as paintings or sculpture as collateral.
Hong Kong is hardly out of the economic woods. It continues to be buffeted by interest rate hikes, and a healthy wealth-management industry can’t cure the travails of its middle class. But the chattering crowds at Art Basel should remind investors that the city retains a profitable artistic edge.
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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Updates to add chart and removes repetition of market stat in second paragraph.)
CONTEXT NEWS
The Art Basel 2023 art fair, which also has editions in Basel, Paris, and Miami Beach, opens to the Hong Kong public from March 23 to 25, marking the first time the event has been held under normal conditions since the Covid-19 pandemic in 2020. Previous events were cancelled or held mostly online.
Chief Executive John Lee’s government is hosting the “Wealth for Good” summit on March 24. The objective is to “promote Hong Kong’s asset and wealth management industry and encourage more family offices to establish a presence in our market,” according to the city’s Financial Services and the Treasury Bureau.
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