ИСТИНА

Investing in fine arts is considered risky and often seems to be devoid of any logic. However, it allows investors to reduce the level of correlation between the returns from various assets in their portfolios and diversify risks related to the price and exchange rate volatility. According to Artprice, the “returns on art over the last few years have outperformed many other investments.” China’s art market has been rapidly developing in the XXI century and is one of the top 3 largest art markets in the world. Drawing on the analysis of statistical data, industry reports and case studies, this paper identifies key cultural, economic, political, and technological drivers that have affected its development. It argues that investing in fine arts appears to be one of the popular types of alternative investments in China given relatively low-interest rates in banks, overheated real estate market and limitations of the stock market. Nevertheless, China’s art market is a challenging environment for investors. It is characterised by heterogeneity, low transparency and liquidity. It is difficult to predict the effectiveness of investments. Investors also have to bear costs associated with the expert examination of art pieces in order to ensure their authenticity, as well as the storage of works of art. Finally, despite the digitalisation of art trade entry barriers remain relatively high.