State of the art: Chinese market flounders

Summary

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Economist Podcasts – "State of the art: Chinese market flounders" (Jan 2, 2026)

Main Theme

This episode of The Economist’s “The Intelligence” delves into the sharp decline of China’s art market, revealing its close ties to the country’s real estate crisis. Business and finance editor Don Weinland joins the show to unpack how China's once explosive property sector fueled an era of ostentatious art buying, and how its collapse has sent ripples through the world of fine art. Further segments touch briefly on British migration trends and the phase-out of the American penny.

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Key Discussion Points & Insights

1. The Rise and Fall of Chinese Art Market Wealth (01:40–05:20)

• Boom Years Linked to Property Wealth

  • In the early 2000s, a booming property market in China generated enormous wealth, much of which flowed into the high-end art market.
  • “Some of China’s nouveau riche were keen to flash their newfound cash. One way of doing that was to get into the art market.” — Don Weinland (01:50)
  • Lavish art purchases became methods for tycoons to display wealth, including headline-grabbing sales like Leo Y Chan’s $170 million acquisition of a Modigliani painting in 2015.

• The Real Estate Collapse Halts the Party

  • The collapse of major property firms (like Evergrande) in 2021 was mirrored by a steep downturn in Chinese art sales.
  • “At the same time, Chinese art sales have slumped.” — Don Weinland (02:35)

2. Data Behind the Decline (03:37–05:20)

• Dramatic Price and Volume Drop

  • The MM Chinese Art Price Index, which tracks 327 top artworks, multiplied 15-fold during the boom (2000–2020), peaking in 2020.
  • By 2025, prices had fallen back to 2009 levels—a 15-year reversal.
  • “Art sales were down by 31% in 2024 compared to the year before…in 2023 [one collector] tried to sell off 39 pieces...10...went unsold and 29 of them sold for below their expected value.” — Don Weinland (04:29)

• Impact on Artists and Market Participants

  • Even top artists’ work has sharply devalued: for Zhou Chunya, the highest-grossing artist in China in 2024, transaction value dropped 43% year-on-year.

3. Compounding Factors Beyond Real Estate (05:20–07:25)

• COVID Lockdowns and Policy Shifts

  • Persistent COVID restrictions in China (when the West reopened) left galleries empty and stifled both domestic and international demand for art.
  • “If you wanted to enter China in 2022...you had to quarantine for, like, three weeks. This has permanently affected some of the galleries.” — Don Weinland (06:14)

• Government Crackdown on Opulence

  • State discouragement of conspicuous consumption led wealthy buyers to avoid drawing media attention with major art purchases.
  • “Liu Y Qian spending $170 million on a piece of art and making sure the world knows that he used his amex card to purchase it — that is just not happening anymore.” — Don Weinland (07:04)
  • Tighter capital controls also complicate using art for money movement or laundering, curbing traditional motivations for big-ticket art sales.

4. The Market’s Future: Is a Decoupling Coming? (08:19–09:36)

• Real Estate Slump Not the End for Art
  • The property crisis is set to continue, but insiders believe art sales may diverge from real estate woes as genuine collectors (rather than speculators) play a bigger role.
  • “Collectors [now are] buying art out of genuine interest...You don’t have flashy purchases but you have people who have cultivated a real understanding of the art.” — Don Weinland (08:42)
  • The rise of tech billionaires and the potential for them to establish museums or foundations could re-energize art demand in new ways.
  • “Tech tycoons might become more active in this market...that could have an impact on the direction of art prices over the next couple of years.” — Don Weinland (09:09)
  • A lasting separation between property and art may ultimately benefit the stability of China’s art market.

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Notable Quotes & Memorable Moments

• “There’s a straight line between those two slumps.” — Jason Palmer, referring to the property and art markets (03:05)
• “Even China’s top artists are not making nearly as much.” — Don Weinland, on the market impact for Chinese artists (05:25)
• “Tycoons are trying to stay out of the limelight these days, and one way of doing that is by not making these flashy transactions.” — Don Weinland (07:08)
• “I think we will see a divergence between property prices and art prices in China. It’s probably a good thing for the long term stability of the industry.” — Don Weinland (09:26)

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Important Timestamps

• 01:40 – Don Weinland explains the beginnings of China’s art boom
• 02:14 – Dramatic Modigliani auction: sale for $170 million
• 03:41 – MM Art Price Index: long-term data, effects of bust
• 05:25 – Effects on China’s leading artists
• 06:14 – COVID’s unique impact on Chinese galleries
• 07:04 – Government’s moves against conspicuous spending
• 08:19 – The uncertain future of both markets
• 09:09 – The potential role of tech billionaires
• 09:36 – Episode’s main art segment wraps up

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Tone & Style

The episode maintains The Economist’s characteristic balance of insightful analysis and measured objectivity, seasoned with occasional dry wit and moments of journalistic curiosity.

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Additional Segments Briefly Covered

• UK Migration “Brain Drain” Myth (10:30–15:01)

  • Despite headlines, there is no statistical “mass exodus” or brain drain of Brits post-Brexit. Apparent changes mostly reflect shifts in measurement methods and a brief Brexit-related migration wave.
  • “There is no brain drain, effectively.” — James Francham (14:14)

• Obituary of the American Penny (15:42–21:41)

  • A narrative elegy for the discontinued penny, reflecting on its long history and declining practical and sentimental value.

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This summary captures the heart of the episode for listeners interested in China’s financial and cultural trends, as well as those seeking clarity on recent migration and cultural changes in the UK and US.

Transcript

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[Jason Palmer]

The economist.

[Rosie Blore]

Hello and welcome to the Intelligence from the Economist. I'm your host, Rosie Blore.

[Jason Palmer]

And I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.

[Rosie Blore]

Read the headlines and you'd be forgiven for thinking there was a mass exodus from Britain. But when our correspondent dug into the data, the evidence wasn't so clear cut. And in the past, you could buy a loaf of bread or a pint of beer with it. Now it will barely get you anything at all. As part of our World Ahead series, our obituaries editor mourns the death of the American penny.

[Jason Palmer]

First up, though.

[Don Weinland]

The property boom that started in China in the early 2000s became one of the fastest generators of wealth in history.

[Jason Palmer]

Don Weinland is our China Business and Finance editor.

[Don Weinland]

Some of China's nouveau riche were keen to flash their newfound cash. One way of doing that was to get into the art market. They started buying very expensive pieces of art, and this was a way of flaunting their wealth.

[James Francham]

So we moved to the beautiful Modigliani. Lot 8, painted in Paris in 1718. $75 million. 75 million. 80 million. $80 million.

[Don Weinland]

In 2015, Leo Y Chan, a cab driver turned property magnate, bought Amedeo Modigliani's painting New Cochet at auction.

[James Francham]

I'm selling it. Last chance. All done at $152 million. Sold here, 1561.

[Don Weinland]

Including the buyer's premium, he ended up paying $170 million, the second highest price paid in an art auction at the time. And it wasn't just Leo who was buying art. The founder of Chinese property giant Evergrande also began buying a lot of art. There were lots of Chinese property tycoons, but companies like Evergrande and the Chinese property market itself started to fall apart in 2021. At the same time, Chinese art sales have slumped.

[Jason Palmer]

So it sounds like the fates of the property market and the art market are just inextricably linked here. There's a straight line between those two slumps.

[Don Weinland]

I think that's correct. There's a number of Factors that have contributed to Chinese art prices coming down. A big one was the COVID lockdowns. Capital controls have played a big role. Even the state's distaste for opulent spending probably has hurt the Chinese art market. But nothing really has taken a bigger toll than the collapse of China's property sector.

[Jason Palmer]

Well, let's put some numbers to it. What is the size of the toll taken?

[Don Weinland]

So the art world is notoriously private. It's not always possible to see how much pieces of art sell for in the private market. But there's one index that's really tracking Chinese works of art. So we're no longer talking about the Modiglianis, we're talking about Chinese artists and the value at which their art is changing hands. So the MM Chinese Art Price Index tracks 327 works of Chinese art as they change hands between 1988 and 2022. And if we look at this index, we can see that during the heady days of the property boom, between the year 2000, 2020, this art price index increases over 15 times. So Chinese art prices are soaring during this 20 year period. They peak in 2020, and by the time we get to 2025, they've fallen back to 2009 levels. So that means art prices today are around the same level as they were about 15 years ago, at least according to this index, art sales were down by 31% in 2024 compared to the year before. And the owner of the new has put up a lot of his art over the past couple years. So in 2023 he tried to sell off 39 pieces of art. 10 of them went unsold and 29 of them sold for below their expected value. So it's pretty clear that whether it's foreign art or Chinese art, the Chinese art world is really struggling these days.

[Jason Palmer]

And presumably Chinese artists on the basis of this index, I would think that.

[Don Weinland]

Most artists around the world are struggling in general. But if we're looking at the most valuable artists in terms of transaction values in China, Zhou Chunya is at the top in 2024. And yet the value of the transactions in his art have fallen by 43% year on year, according to Hurin, which is a consulting firm that tracks wealthy people and art transactions. So it's pretty easy to see that even China's top artists are not making nearly as much. Or the people trading in their art are also not making very much off these transactions compared to just the year before.

[Jason Palmer]

And I'm interested to know what's really going on here. You said the slump in art tracks that in property, but that wasn't the only thing going on.

[Don Weinland]

That's right. So Covid hurt global markets. Regardless of what area we're talking about, they certainly hurt the art market in America and Europe and in China. One of the biggest problems in China was that as the rest of the world opened, opened up, China was still going into lockdowns. The rest of the world was going back to galleries and museums in China. It was very, very hard. And if you wanted to enter China in 2022 to look at a piece of artwork, or if you wanted to leave China, it was very hard. Upon entry, you had to quarantine for, like, three weeks. So this has permanently affected some of the galleries here. We've seen some galleries and museums shutting down recently.

[Jason Palmer]

And alongside that, you mentioned there was this state push against flashing cash.

[Don Weinland]

That is also correct. So the days of property tycoons purposefully making news stories out of these massive transactions. So Liu y Qian spending $170 million on a piece of art and making sure that the world knows that he used his amex card to purchase it. That is just not happening anymore. And this is because the Chinese government has a clear distaste with opulent spending. Tycoons are trying to stay out of the limelight these days. And one way of doing that is by not making these flashy transactions. There's another aspect of this as well, which is connected to the state. And art, regardless of where you are, has been used as a way of laundering money for many years. And in China 10 years ago, if you wanted to move a large sum of money out of the country, one way of doing this was to purchase a piece of art in Europe or in America. And it was relatively easy to do for people with a lot of money. Today, it's become a lot more difficult. So there's a lot more scrutiny on these types of investments, and a lot of them get blocked. So the state, in some ways is making it more difficult for these types of transactions to happen.

[Jason Palmer]

But the biggest factor, you said, is this change in the property market, which hasn't yet reached bottom. I mean, are these things going to remain paired?

[Don Weinland]

Property prices are expected to come down for several more years. There's no end in sight for this real estate crisis in China. But I don't think that means the art market is going to stay depressed forever here. One thing we see right now is collectors buying art out of genuine interest and appreciation. You don't have the flashy purchases but you people who have cultivated a real understanding of the art and are continuing to collect, so that's, I would say, a healthy development. China also has a lot of tech billionaires and they haven't been very active in the art market in the past couple years. But from what I gathered during my reporting on this piece, it sounds like tech tycoons might become more active in this market and you might see tech billionaires setting up museums or foundations. So that really could have an impact on the direction of art prices over the next couple years. And I think we will see a divergence between property prices and art prices in China. It's probably a good thing for the long term stability of the industry.

[Jason Palmer]

Thanks very much for joining us, Don.

[Don Weinland]

Thank you.

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[Rosie Blore]

Read the newspapers in Britain and you'd be forgiven for thinking that there's a mass exodus of Brits from the country. One even labeled it brain drain from Starmer's socialist chaos. But is that really what's happening?

[James Francham]

A casual glance at the statistics suggests that Britons are fleeing the country of their birth in their droves.

[Rosie Blore]

James Francham is a data correspondent.

[James Francham]

More careful assessment of the data concludes that this is not the case at all.

[Rosie Blore]

So James, what's really going on here? Some of the time people seem to be anxious about people arriving. Some of the time they're worried about them leaving. What's actually at stake?

[James Francham]

Well, for some time now, immigration has been the biggest topic in Britain. It's a classical hot potato, as it were, that's led by several things. One is small boats and asylum seekers and where to house them. And secondly, it's regular migration. So long term, nat migration, as the statisticians call it in Britain now that figure is falling quite dramatically. Distinct from that, there's a concern that people with talent are leaving the country.

[Rosie Blore]

So what is it that the stats show?

[James Francham]

So net migration is made up of simply people coming to the UK inflows and those leaving the country outflows known as emigration and the ons, that's the Office for National Statistics. Break that into three groups of people, three buckets of Europeans, non Europeans and British citizens. The overall figure, net migration is falling now from a peak of nearly 1 million a couple of years ago to about 200,000 in the latest 12 months. That's really good news for politicians. Every politician of all stripes basically wants net migration to be lower. Indeed, there was a target several years ago during the Cameron administration, 2010 to 2016, that they want it below 100,000. There's a good chance it actually might get there in a few years, given where things are going. But outflows of British citizens, the third bucket has increased from 82,000 to 109,000 over the past six years. That's a 33% rise. It looks superficially like there's been a massive outflow of British citizens over the past few years. Years. But that's a real misunderstanding of the data.

[Rosie Blore]

Okay, why?

[James Francham]

Because the ONS used to measure the emigration of Brits with basically a survey at airports. People with clipboards would ask you where you go to, how long are you planning to go for? And that would be the basis for our immigration figure. They've realised that that method's a bit junky. So what they're doing now is to look at the tax and benefit system. So have you paid tax or have you claimed benefits over the past 12 months? If not, you may well have emigrated. What you have resol of these two different methods is there's discontinuity in 2021 where you've got this survey based method and then you've got this admin based method and we don't really know actually what the true figure of emigration is.

[Rosie Blore]

And is there a way to find out?

[James Francham]

We did some number crunching of our own to try and actually tease out the true figure for emigration of British citizens. So how do you go about this? Well, we can go to the individual countries because actually individual countries record who are coming to their countries and the OECD compile all this data. It's kind of net migration flows, effectively. And so if you look all this data for about 30 OECD countries, which account for probably about 90% of the British diaspora across the world, we estimate that emigration averaged about 275,000 before Brexit in 2020 compared with about 220,000 today. You see a gradual rise as people took their last opportunity to move to the EU and work there freely. And then you see this cliff edge effect as free movement ends in 2021.

[Rosie Blore]

So there's no brain drain.

[James Francham]

There is no brain drain. Effectively. What I would caveat however, is we don't know anything about the profile of these people. Right. So there may have been a massive shift in the types of people that move, but actually looking for evidence of that, for example, so a lot of people pointed to all the people that are leaving the country are young. All the people that used to leave the country were young. There's been no shift there. I spoke to people, Henley and partners, who basically sought out visas for rich people who want to move around the world. And the chat there didn't present me with any evidence that people were flocking to the UAE in numbers that were either alarming or substantial. I reckon about 15,000 people a year are moving to the UAE. Can we classify this as a brain drain? I don't think we can.

[Rosie Blore]

James, thank you very much.

[James Francham]

My pleasure.

[Rosie Blore]

It's dark, it's January and the party is over. No wonder many of us feel in need of a little warmth right now. Well, tomorrow we have just the thing. On the weekend Intelligence, our correspondents investigate a rising trend. The Great British Sauna. You'll have to be a subscriber to listen.

[Ann Roe]

In solitary state, the small brown coin lay on the windowsill in the potting shed. He was warmed by the morning sun and walked over by spiders.

[Rosie Blore]

Ann Roe is the Economist obituary's editor.

[Ann Roe]

He was a good looking coin. As coins went on his obverse, he had the stern, whiskered face of Abraham Lincoln on his reverse, he had the Lincoln Memorial. And these were both clues that he had been minted between 1959 and 2009. If anyone wanted to inquire about his age, however, his days seemed to be limited. The mint, in its wisdom, had decided that it cost far more to make him. In 2024, that had been 3.69 cents. And it was losing so much money a year minting him and his companions that it was going to stop production. Well, he might have looked like a good looking coin, but in fact he no longer had a healthy glow about him because there was very little copper in him. When his earliest ancestor had been minted in 1787, he had been almost all copper. But now there was only about 2% copper in him and all the rest was zinc. Zinc was the material of feed buckets and hip baths and it was generally a very much lower class of metal. He was also feeling lonely and lacking company because for most of his existence he had been scrambled up with other coins like himself. He'd either been at the bottom of a purse, clinking about with tissues and lipsticks, or he'd been in a jar on a kitchen shelf with perhaps a hundred others, all with their edges in his face. Or he'd been rattling around in the pockets of old cash tills. How very odd it was to be by himself. In fact, there had been a man in Louisiana who had once collected, collected 1.3 million pennies in 55 gallon drums in his garage. And he did thank the Lord he hadn't been mixed up with that Lord. Increasingly, however, he was seen as a nuisance. When people went shopping with him and got him in the change, they'd often just contentiously wave him away and say, keep, keep the penny. Sometimes they even just left it behind. Vending machines spat him out as they didn't like the zinc and he felt he was worth nothing at all. Now, back in the 1800s, you could have bought a loaf of bread or a pint of beer with him. As time went by, it got less. But in 1825 you could still buy £5 of potatoes. Even in 1830 you could still buy a mile of rail travel. Or you could buy a copy of the New York Tribune. But his value dwindled and dwindled until you could only buy a Tootsie Roll. And even the Tootsie Rolls got smaller and smaller as time went by. But all the same, he felt he was economically important. He encouraged careful budgeting and exactitude. With him around, you didn't have to round up to a nickel. You could pay the exact price. And all those pennies did, after a while, add up to something. His presence encouraged people to buy. If your Donald Trump Action man toy was $20.99, it was somehow cheaper by quite a degree than $21. And so that encouraged consumption and encouraged the economy. And then what about charity? With the centre round, it was easy to collect bags and bags of coins for good causes. And in many cities there was a proper organization that did so and sent children out with cloth bags door to door to reap what they called harvest pennies. Where would all those tins and boxes be collecting coins for good causes if he was not there? People were only too happy to empty their pockets of pennies and they would go on their way feeling light and virtuous. All the same, he did wonder what his future would be. Now he felt sure there would be uses for him. After all, pennies were lucky. There were surely things he could do that would be helpful. For example, being a fairly good looking penny, he could make a pendant. He could also space out tiles on a floor. He could stop a chair from wobbling. If you stuck him to the end of a leg, he could turn fridge thermostats and he could prize the ring off a can of Coke. There were probably many more uses that could be found for him, if people thought about it. As he lay there, he became resigned to the fact that his days were numbered as the mint had stopped producing. But perhaps that meant eventually that he would become rare, perhaps as rare as the draped bust Liberty Penny, whom he was vaguely fond of, although she was much too old for him. Perhaps he would become a collector's item. And anyway, with all those uses he had found for himself, perhaps some people would come to appreciate that face value and intrinsic worth were not at all the same thing.

[Rosie Blore]

Anne Rowe on the scent, which has been discontinued after 230 years. And you can read more articles from our World ahead series on economist.com. That's all for this episode of the Intelligence. The show's editors are Chris Impey and Jack Gill. Our deputy editor is Sarah Lanyuk. Our sound designer is Will Rowe, with help this week from Mark Burrows. Our senior producers are Henrietta McFarlane and Alizer Jean Batista and our senior creative producer is William Warren. Our producers are Anne Hannah and Jonathan Day, with extra production help this week from John Jo Devlin, Emily Elias and Benji Guy. We'll all see you back here for the weekend. Intelligence tomorrow.