Market Trends

Art Basel Hong Kong Resurges to Pre-Pandemic Vitality

In an electrifying revitalization of Hong Kong's cultural landscape, Art Basel is making its grand return, now restored to its former pre-pandemic glory.

As the city thrums with anticipation, this eminent art fair opens its doors to the public, boasting an impressive roster of 242 international galleries, including 69 making a comeback after a pause, alongside 23 debuting their exhibits. This remarkable upsurge from last year's turnout of about 177 galleries marks a departure from the past reliance on hybrid formats necessitated by COVID restrictions.

A Major Test for Hong Kong's Event Scene

The latest edition of Art Basel in Hong Kong represents a pivotal moment for the city's capability to host large-scale international events. Escaping the shadows of controversies and recent high-profile cancellations, authorities are vigorously endeavoring to rejuvenate Hong Kong's image. The city, which has been under the weight of stringent pandemic measures, aims to dispel the doubts shrouding its reputation as a financial and cultural nexus.

The past few months have not been easy for Hong Kong's events scene. A football match that missed the star appeal of Lionel Messi devolved into a political controversy, and a high-profile Christian Dior show was postponed without a new date. Globally-renowned artists like Taylor Swift and Coldplay chose other Asian cities over Hong Kong for their concerts, attracting international fans and underscoring the challenges Hong Kong faces. Meanwhile, tourism is yet to recover fully, and locals find themselves crossing over to mainland China for their shopping escapades.

A Pivot Towards Cultural Significance

"Art Basel is a symbolic event of Hong Kong’s status as an art hub," asserted Gary Ng, a senior economist at Natixis SA, emphasizing its importance in an email exchange. Ng recognizes that as consumer trends evolve from shopping-focused activities to a broader cultural engagement, events like Art Basel gain prominence. Nevertheless, he warns of the growing perils of local and global political tensions affecting the city.

This month, Hong Kong enacted the Article 23 security bill, succeeding the national security law imposed four years prior. This move amplifies apprehensions over the potential stifling of free discourse within the metropolis.

Hong Kong: The Unrivaled Art Market Hub

Despite the tumult, Hong Kong maintains its position as an unrivaled hub for art within the region. Its allure is owed partly to the absence of customs duty, value-added taxes, or estate duty on art. Coupled with advanced logistics and exemplary warehousing services, it's no wonder that auction giants like Christie’s and Sotheby’s are keen on expanding their presence in the city this year.

Even as Singapore unveiled its first Art SG fair whilst Hong Kong grappled with COVID curbs, it had to cut back on its scale this year, perhaps ceding to Hong Kong's recovery and inherent advantages in the art market sector.

Debutant Enthusiasm Amid Seasoned Optimism

Archie Squire, a London-based gallerist and advisor experiencing Hong Kong for the first time, captures the current fervor well: "It’s my first time to Hong Kong, but the art world is happening here," he remarked buoyantly. Squire is among many who have already earmarked pieces from the Kiang Malingue gallery for potential acquisition.

This year's fair is attracting a more diverse international crowd than before, a testament to eased pandemic restrictions. These adjustments came too late the previous year for global art collectors to adjust their plans, resulting in a muted attendance in 2023. Coinciding with Art Basel Hong Kong are other significant financial conclaves like the Milken Institute Global Investors’ Symposium and the Wealth for Good Summit, further signifying Hong Kong's resurgence on the global stage.

Looming Economic Challenges and the Art Market

However, the shadow of China's economic tribulations casts a pall over the scene. The ongoing market sluggishness, exacerbated by a real estate crisis, saps the enthusiasm and purchasing power of many potential buyers.

Philip Hoffman, the founder and chief executive of The Fine Art Group, expounded, "The dealers are approaching with moderated expectations....compelled by a quieter market." Nevertheless, Hoffman observed that key clients remain vigilant for unique opportunities and willing to invest should the right piece present itself.

Last year, China's art market bucked the global downturn trend, posting a 9% increase in sales values, reaching $12.2 billion, according to an Art Basel and UBS report released this month. However, this peak is more reflective of a post-COVID recovery than sustained growth, as the latter half of the year saw a sharp deceleration in activity. The real estate downturn has tightened the purse strings of many, casting a long shadow on the spending power of prospective buyers.

Wendy Xu, the Asia general manager of the esteemed gallery White Cube, noted a tactile shift in buyer behavior. "Chinese collectors are adaptable and have shown resilience," she explained. Since the latter part of the last year, a trend towards conservatism has unfolded, with many opting for in-person viewings as opposed to online purchases.

Yet the aforementioned Art Basel and UBS report also indicates that the country’s economic slowdown may induce affluent individuals to rejig their portfolios in favor of art investments. Art is increasingly viewed as more liquid compared to property, especially in turbulent economic times.

Collectors Seizing Opportune Moments

Elaine Ying, a collector from Shanghai attending the event, elucidated her strategic approach. She sees the art market as a golden opportunity amidst traditional investment sectors' strife. "Chinese collectors are scouring for stable overseas assets," she confides. Ying began her contemporary art collection journey only two years ago and is now keenly assessing the potential of Xu Zhen's enchanting oil painting 'Under Heaven'. "I am in quest of exceptional artworks whose values have yet to soar," Elaine Ying added with an air of anticipation.

As Hong Kong lays out its lavish cultural tapestry through Art Basel, the world watches with bated breath. The success or setback of this storied event will not only dictate the immediate future of the city’s cultural and economic endeavors but could also set a precedent for the global art market at large.

With a plethora of exquisite masterpieces on display and agendas teeming with side events and exclusive viewings, Art Basel Hong Kong is undoubtedly the center of the art world's attention—or at least, for the duration of this illustrious event.

The coming days will reveal how effectively Hong Kong has broken free from the constraints of its recent history to once again position itself as the fulcrum of contemporary art commerce. It is a definitive juncture: whether the city reascends to its pinnacle of cultural aristocracy or continues to grapple with the specters of an evolving geopolitical and economic landscape.

Indeed, as Art Basel breathes new life into a city keen on reclaiming its former vibrancy, the world's eyes will, for a moment, turn from the glittering skyscrapers and bustling trade floors to the canvases, sculptures, and installations that speak the universal language of creativity and expression.

Hong Kong's declaration through this year’s Art Basel is resounding – a siren call to art aficionados, collectors, and the global community – signaling that the heart of Asian art beats strong, even amidst seas of change.

As the Art Basel Hong Kong chapter unfolds, the cityscape of Hong Kong transforms into a vivid tableau where tradition meets modernity, commerce intertwines with creativity, and every stroke, hue, and installation transcends mere aesthetics to echo the indomitable spirit of a city that refuses to fade into the background.

As tides shift and markets fluctuate, art remains an eternal compass pointing towards beauty, value, and an intrinsic human connection that outlasts even the sturdiest of economic constructs. This year's Art Basel in Hong Kong is more than an art fair; it is a testament to resilience, a celebration of creative persistence, and a canvas conveying the stories of artists, collectors, and a city alike.

©2024 Bloomberg L.P.