From antiques to paintings, art collections are garnering huge profits for their possessors as the auction industry grabs the limelight from the securities and real estate markets for investment in 2005.

An estimated 4 billion yuan (500 million U.S. dollars) changed hands for antique and painting transactions in 2005, a rosy year for the art auction industry.

Artist Lu Yanshao's painting album depicting artistic conceptions in Du Fu's poetry fetched 69.3 million yuan (8.6 million U.S. dollars), breaking the highest record for Chinese paintings at auctions.

"The art market in China has just taken shape, and bears a huge potential as incomes rise steadily," said Yang Xiu, a senior manager of the Nanjing Tiandi Group, owner of the Changfengtang Museum, which bought Lu Yanshao's paintings.

He said art collection is a good investment channel now in China, since the securities market has gone through doldrums in recent years. The real estate market has been confined by the country's macro economic control regulations, narrowing profit margins for investors as a result.

China's art auction industry made a scene in 2003, when the market scale almost tripled that of 10 years ago.

Its momentum continued in 2005.

China's 24 top auction houses in major metropolises such as Beijing, Shanghai and Hong Kong offered 19,062 objects for auction in the spring auction season of 2005, with the total sales volume amounting to 3.29 billion yuan (411 million U.S. dollars), representing a 50 percent increase from the autumn auction in 2004.

The Xiling Publishing House, China's oldest society researching seal cutting, entered the art auction industry in July 2005, when it set a remarkable transaction at 196 million yuan in a single auction, said the auctioneer Liu Xinhui.

Xiling's auction in Dec. 18 last year garnered 256 million yuan (32 million U.S. dollars), which reinforced its leading role in the art auction in the south China region.

An oil painting piece named Miss Zhen Ni's Portrait by Chinese noted artist Xu Beihong was valued at 22 million yuan (2.75 million U.S. dollars)in Beijing's Poly Auction in November last year, which still marks the highest price for an individual oil painting work at Chinese auctions.

"The risk of investing in Chinese contemporary oil paintings is low, since the cost is comparatively low, and such painting collections have a huge room for value appreciation," said Wang

Yi, an art expo organizer in east China's Zhejiang Province.

He said that in Zhejiang, one of the fastest developing regions in China's eastern coast, some 500 million yuan (62.5 million U.S. dollars) capital flew to the oil painting market in 2005, which was about one eighth of the total transactions for collections of antiques, paintings and calligraphy works in the province.

Many investors considered that the Chinese art collection market has become the third most popular investment target following stock and real estate.

Official statistics show that China had altogether more than 100 million individual collectors in 2004, with an estimated volume of business at no less than 10 billion yuan (around 1.2 billion US dollars).

Source: Xinhua