Surviving the pandemic and massive protests, there are concerns about whether Hong Kong has lost its position as an international leading international financial and commercial hub. However, from the first few days of Hong Kong Art Week, it has been clear that the city is paying back with confidence. Although it may not have reached pre-pandemic heights, the momentum is undeniable, with both government and private investment fueling ambitious new projects and long-term development. Although the city is not affected by macroeconomic pressures and ever-present geopolitical complexity, Hong Kong (and the broader Asia-Pacific region) is likely to be one of the most stable places in a time of global instability.
As Art Basel Hong Kong opens, observers meet Fotini Xydas, head of art finance at Citi Wealth, and Betsy Bickar, art consultant and senior vice president of Citi Wealth, discusses regional market trends where art and wealth management intersect.
Hong Kong is growing in population and high net worth, and although the pandemic-era lockdown has brought art centers to appear elsewhere in Asia, both Xydas and Bickar are clear: Hong Kong remains the main hub for the international art trade in Asia Pacific. “The fact that all investments are used to secure auction houses at major regional headquarters in Hong Kong is a true belief in the market there,” Bikal said. “We see very complex contemporary collections in the region. I think there is a lot of change in the Asian market overall. Obviously, it is obviously a focus on youth culture, especially among new collectors, but they have also developed a more open mind in terms of cross-genre collections.”
Bickar and Xydas agreed that the arrival of Art Basel in 2013 and the subsequent expansion of the international auction house to the city’s figures is crucial, which is crucial in fostering a more global collection culture. “In the beginning, especially collecting collections of Asian artists, but over the years we have seen that this has expanded to more Western artists,” Xydas said. She noted that there is increasing awareness of Asian art as an asset class and people are increasingly seen as an important part of a broader portfolio strategy. They also see great potential for growth in the art loan sector. Nevertheless, this presents challenges, as art must already have an international market to be considered viable collateral.
Meanwhile, auction houses in Hong Kong are trying more eclectic cross-category sales to attract a variety of local wealth tastes. “Most of the time, it’s an interesting combination,” Bikal said. “They understand and show how you put the iconic Unlimited Network Next to Pierre Auguste Renoir next to Yayoi Kusama. “The luxury boutique experience offered by new Sotheby’s Central spans categories and time periods, and it’s a great example of the auction house positioning itself as a destination for a new generation of affluent collectors to expand its profile beyond the traditional auction model.
But despite Citi experts expressing optimism, Hong Kong now faces new challenges, including the consequences of the escalating U.S.-China trade war. President Donald Trump’s decision to classify Hong Kong exports as “a product of Chinese descent” triggered a quick response despite protests from the city government. Many international shipping companies have left the market, including Deliveroo, which announced that it would close its Hong Kong operations nine years later. FedEx has moved its Asia-Pacific headquarters from Hong Kong to Singapore in 2023.
Since the controversial National Security Act implemented an effective national security law that effectively tethered cities to the wider control of the Chinese government, international media continued to speculate on the potential decline of Hong Kong as a global financial center. Hong Kong authorities are actively opposing these narratives through new investments. This year, the government’s large-scale arts and cultural activities fund supports the Basel Centre for the Arts and Arts. At the same time, it paused the backup to get the optical feed, which was eventually cancelled. The cultural sector that the city once built is now facing economic headwinds. The ambitious West Kowloon Cultural District – to M+ and Palace Museum – is currently seeking private investors to pay a deficit of HK$1 billion (US$128.7 million) in the current fiscal year.
The signals from China’s wider art market are not particularly reassuring either. Total auction sales in China fell 46.1% in 2024, down from $3.49 billion in 2023 to $1.9 billion, according to the Artnet Price database. Hong Kong auction markets have also been hit with a 33% drop in modern and modern art sales to $576 million, marking the lowest level since 2017.
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In stark contrast, data on global collections from the Art Basel and UBS Survey released earlier this year show signs of resilience in the region. Respondents in mainland China once again reported the highest level of median spending, while Japan and Hong Kong had the lowest records, with more sellers. Despite this, Hong Kong still puts the second largest share of global art imports in 19%, and mainland China has increased by another 5%. Export figures are also surprising: Hong Kong’s share has grown from 2% in 2010 to 18% in 2023, surpassing the UK
There are also signs of strength in a specific market segment. Phillips reported that in the spring 2024 auction, Hong Kong sales increased by 22% compared to October 2023, indicating a selective recovery. Earlier this year, the M+ Museum signed a new Memorandum of Understanding (MOU) with New York’s MOMA, the first comprehensive collaboration between American institutions and Asian museums. The partnership will cover curatorial research and exchange, conservation, program sharing and professional development, further positioning M+ as a cultural leader in the region. The initiative aims to strengthen the connection between the two institutions and help define M+ as “Asian MOMA”, an anchor for the visual culture in the region.
When considering the future prospects of Hong Kong, it is worth mentioning the millionaires who understand the real market potential of the region. According to the Art Basel & UBS report, the United States remains the world’s largest HNW wealth center in 2023, accounting for 38% of the global population (unchanged from 2022). China (including mainland China and Hong Kong) rose with a 12% attitude. However, the fastest growth in millionaires is expected to be in major Asian regions outside mainland China, including Taiwan, Japan, South Korea and Indonesia. India (up 41% to $954) and China as key players, the region also includes other important markets such as Japan, Taiwan and South Korea. Overall, Asia’s share of global billionaire wealth has risen to 27%, surpassing Europe’s 22%. These figures are particularly important given the ongoing generational wealth transfer, and are expected to change hands of $84 trillion in assets over the next two decades.
Bikal confirmed that mainland China continues to raise its own challenges, telling observers that Seoul and Japan are particularly convincing at the moment, especially in the post-war market and the post-war market. On the financial side, Xydas is piqued interest in watching Singapore, although she notes that the city may take some time to develop the kind of full-spectrum art ecosystem that Hong Kong already has.
Conversely, while Japan’s art sector has grown 11% (record growth) since 2019 and is expected to expand more widely, the Korean art market has begun to slow down. During the 2021 Frieze Seoul’s founding year, the Korean art market soared 96% from the previous year, while transactions peaked at 806.6 billion won in 2022. But by 2023, this upward trajectory has been reversed. South Korea’s new political turmoil and the depreciation of winners complicates the recession, with the trend continuing into 2024. The leading auction house reported a 25.2% drop in successful bidding success rate compared to the previous year, and major markets followed, getting along with the broader global model.
At present, none of these rising centres have managed to replace Hong Kong as the core market for high-value art deals in the region, or sell large quantities at lower prices at lower points of value. Emphasizing this, Christie’s will host its first-ever evening sale during Art Basel on March 28, the title of Basquiat in 1984, with an estimated HK$95 million to HK$125 million (about US$13 million to US$16 million). Meanwhile, Phillips and Sotheby’s will attract the podium the next night with their seasonal modern and modern night sales, including international blue chip works and outstanding regional names.
Amid this rapidly changing landscape and ongoing challenges and uncertainties, this year’s Basel artwork and this week’s auction will be a trial of Hong Kong’s current role in the global art market. Everyone was watching whether it could hold the top position.
