China steps up art investment as prices soar

China is stepping up its investment in art, just as experts warn about the sector's soaring prices.

China has long been an established buyer of any asset with the potential for profit, from real estate overseas to precious metals and raw materials. Fine art, though, has increasingly become fertile hunting ground for investors.

In 2014, the country accounted for more than a quarter of art sales at auction around the globe - roughly $4.4 billion in transactions, according to Citigroup - posing a threat to the traditional British and American-led demand.

"Back in 2000, auction sales [of fine art] in China were essentially a rounding error in the global auction market statistics," a report from Citigroup says. "Now, that one-time rounding error is the world’s second-largest art market, behind only the United States."

China, nobody needs reminding, is currently going through its economic slowdown, which could sap interest, but for now, art sales are booming on the back of their new driving force.

This month, an auction at Christie's broke a record for Modigliani, whose Nu Couche sold $100 million more than any sum paid for the artist's work. The Italian painting sold for $170.4 million, making it the second most expensive painting ever sold at auction. The buyer? Liu Yiqian, a billionaire from Shanghai.

The sale saw artist records also broken for 11 other painters, including Bourgeois, Courbet, Fontana, Gauguin and Lichtenstein.

"This has been a strong week of sales at Christie’s with robust sell-through rates of 80 per cent by lot across all price levels of the Impressionist, Modern and Contemporary art markets," says Jussi Pylkkänen, Global President of Christie’s International.

But some are now urging caution surrounding the increasingly expensive market.

Billionaire Ken Griffin, founder of the Citadel hedge fund, told CNBC that art has shifted from being dominated by dealers or collectors to being filled with investors.

"I think people should be very hesitant in thinking about art as an investment," he said. "I would have some cause for concern around that."