Chinese antiques a new cash cow for speculators

13:56, January 10, 2011      

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Lately, Chinese antiques have been attracting huge amounts of speculative capital. However, to secure returns in the future, the special characteristics of this new target call for more considerations than simply the monetary value.

Incomplete statistics show that deals worth more than 50 billion yuan were made on China's auction market on the sale of Chinese antiques as well as arts and crafts in 2010, surging 123 percent over 2009 and hitting the target of 50 billion yuan previously set for 2013.

Some 10 pieces of Chinese antiques or art and crafts were sold for more than 100 million yuan compared with only 4 pieces in 2009, and their varieties were more diversified than those sold in 2009. A vase made in the Qing Dynasty, for example, was sold 51.6 million pounds sterling (about 554 million yuan) in London in November 2010, setting a new record for the auction price of Chinese chinaware.

However, those who paid record prices are not from the antique dealers or brokers from Hong Kong or Taiwan. They are non-professional institutions and their representatives. This means big capital investors are playing the leading role in this market.

The market is expected to be bullish again in 2011. The prospect is supported by the long-term promising outlook of China's macro-economy, the Chinese government's resolve to reign in the red-hot property market and the less-than-satisfactory returns on the stock market. It is also fueled by the growing demand for more investment instruments to keep and raise the value of people's money.

However, investors should pay more attention to two unique characteristics of antiques and arts and crafts. First, the liquidity of such investment is much more limited than any other instruments as they have a much longer investment cycle. Second, unlike stocks, buyers may appreciate the artistic value of the antiques and art and crafts once they have them, and they may be hesitant to sell. Given that, it may not be easy for speculative capital to cash in on their collections.

Monetary value is not the only thing to be considered when investing in antiques or arts and crafts. It has to be combined with academic and art investments in this market, experts say.

By Li Jia, People’s Daily Online


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