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MARK AUSTIN THOMAS: Economic growth continues in China. Investment in fixed assets like airports or apartment blocks is slowing a bit, but many economists see that as good news. China is the world's fourth-largest economy. That nation's growth has lead to a lot of extra money in the bank accounts of a swelling middle class. Some of that cash is finding its way into art auction houses. Marketplace's Jocelyn Ford takes us behind the scenes.
JOCELYN FORD: The scene: a crowded Beijing hotel ballroom on a Saturday afternoon.
500 auction-goers look on as a debonair auctioneer in a tuxedo quietly talks up the price of a 1940 masterpiece. It's by the first Chinese artist to do western oil painting.
Final Price: $3.78 million.
That's an all-time record for a Chinese oil painting.
BING YIHUANG:"Amazing, I'm so glad I came!"
Art Professor Bing Yihuang was one of the people in the crowd trying to figure out what's behind China's brand new interest in its own contemporary oil paintings.
YIHUANG:"It used to be international collectors pretty much owning a large part of it. But the last two years things have been changing. It's domestic market. It really is booming."
Prices have doubled and tripled, and Chinese buyers have started making the rounds at international auction houses.
They include people like scrap metal importer Lina Zhang. Two years ago, Lina wasn't interested in art, but her friend convinced her it's a good investment.
She says these days real estate doesn't give very good returns. Lina and her partner have bought 70 paintings and she figures they have already doubled in value.
In a country where most people believe the stock market is rigged, art writer Michael Hatch says painting is looking like a good investment.
MICHAEL HATCH:"You've got real estate and you've got art, essentially here. And so if you don't like houses, why not a really great painting. It makes you cultured as well?"
But many people think the auctions are also rigged, sometimes by artists.
Brian Wallace opened china's first contemporary art gallery 16 years ago.
BRIAN WALLACE:"In the domestic auction it's total manipulation of the market."
This is how it works.
The artist pays a commission to the auction house and gets someone to put in a very high phony bid. The bidder doesn't actually pay or bring the picture home. Then, the artist hits up the gallery.
WALLACE: "Some artists come back and say 'well, I was in that auction last week, my work got that high price, so I think prices should go up'. But, any smart gallery owner won't play that game.
When this auction turns to contemporary ink paintings, veteran auctiongoer Cai Pengchen says he smells some funny business.
CAI PENGCHEN:"The price maybe not reasonable."
Cai estimates over a third of auction goers in China are speculators. They buy in the spring, sell in the fall.
So after 10 years of collecting, the retired doctor is thinking of dropping out of the market for well-known Chinese oil painters and focusing on young no-name artists.
In Beijing, I'm Jocelyn Ford for Marketplace.