*The bid is starting at $5 million. $6 million. $7 million. $10 million. *
The auction world has never seen anything like it: a new breed of collector with deep pockets and insatiable appetite.
*$40 million. $55 million. $60 million. 85 in the back there! *
China's nuevo riche are driving up prices in antiquities to record levels.
This is the real beginning. Beginning of a totally new era and China's center stage.
But there's a dark side.
In an undercover investigation we find this explosive demand for art igniting a wave of forgeries.
I'm Steve Chao. On this episode of 101 East, we're in the backyard workshops and auction houses of China,
following a path of fakes and forgeries.
It's autumn auction season in Hong Kong, and the world's premiere art houses have opened their doors.
They're main buyers: Chinese collectors who have become a major force in the art world.
There's one piece I particularly like which dates from the Song dynasty.
It's a little wine cup. As you can see the glaze.
Nicholas Chao of Sotheby's is anticipating his selection of Chinese antique porcelain ware will catch their eye.
Touch the skin. It's very smooth, very soft.
And how much is this? - The estimate is $8 million HK, so $1 million US.
Last year, Chinese buyers spent more than $5.5 billion on arts and antiques worldwide.
Nicholas is an expert on Asian art for Sotheby's, one of the top auction houses in the world.
He's closely followed what he describes as the meteoric rise of the Chinese collector.
It's absolutely monumental. The market has totally re-dynamized.
We have this sort of new enthusiastic group of collectors entering the market
with no perceptions of market price and with a lot of firsts they really went for it.
The highlight of this season's auction is an Imperial painting, painted more than 250 years ago.
The interest here, I think what continues to fascinate people first, is objects made for the Imperial court.
Objects made for the emperors. They're sort of buying back parts of their history.
It's an attempt to rebuild that identity long lost in the 20th century.
But how much of what they're buying is real?
What worries Nicholas is their eagerness to buy and they're lack of knowledge is fueling an industry of fakes.
Fakes are made on a scale that is unimaginable.
How many fakes do you come across in the art world?
99.99% of what you see in the market is fake.
That high of a percentage? - Absolutely.
Everyday I get maybe 20-30 emails jam packed with images of porcelain landing in my mailbox.
And the majority. . ? - Yeah. All of it is fake, pretty much.
It's shaking the auction market to its core.
Before a piece gets offered up, his staff must now spend significant time getting experts worldwide to inspect the items.
Does that upset you?
Umm . . No, it doesn't upset me.
You know we've seen . . . after 1000-2000 times I think you're kind of immune.
But sometime it's greed. You have to understand that if someone shows you a piece and goes
"Ok. Sotheby's sold this for 100. I've got the same and I'm selling it to you for 20."
It's greed to think you're going to get this extraordinary bargain.
At another auction house we meet Mason Wong, a veteran collector and dealer of 40 years.
So how is this one?
Mason has a lifetime of experience buying and selling authentic antiques,
and attributes a photographic memory to being able to spot fakes.
Oh yeah there's a weight to it. Yeah. - And it has the bronze rim.
I think I was a little gifted, you know, because I have a pretty good visual memory.
This may have repair here, but the color is good.
What inspires him is being able to uncover the rich history of China through the piece he collects.
Looks good. But I'm not 100% certain.
He's agreed to look over some items with us.
So what do you think of this one?
The shape is just a little but sloppy. This has a much wider shooter than the foot.
So would you recommend? - I would not collect that one.- You would not collect this one.
That's Mason's way of saying he doesn't trust a piece.
We move on.
This is the mark of Chen Long, but I'm not so sure of the period.
And why is that?
Because this turquoise color is too light.
Most auctioneers won't guarantee an item's authenticity.
Instead, they offer previews like this one, where buyers are given a chance to inspect what's on offer.
Once it's sold, there are no returns.
So this one you would leave aside? Not touch it? - No.
Back at his office, Mason blames the industry as a whole,
saying too often auctioneers and collectors who've been duped keep silent
to protect their reputations and the value of the fakes they buy.
It's not just that fakes take money and trust from unsuspecting buyers,
what pains Mason most of all is that they can also distort history.
To show us how, he's taking us into the misty hills of northern China.
Mason's brought along another avid collector, William Zeng.
Like a master with his apprentice, Mason is passing on a lifetime of experience and expertise,
including how to spot forgeries.
At an excavation site turned museum, Mason introduces William to an old friend: archeologist, Guo Da Shun.
In the 1980s Mason and Guo helped piece together the history of Hon San, China's oldest civilization.
They're study of jade artifacts found alongside skeletal remains in these tombs
helped tell the story of a sophisticated culture.
Those artifacts are now on display.
The intricate jade carvings rich in symbols of Chinese folklore.
But it was while piecing together the history of this site, that Guo had his first run in with fake jade artifacts.
Soon after we first made this discovery in the 1980s, copies began showing up in public.
We thought it was strange at the time.
But then in the 90s, to our surprise, the number of forgeries exploded.
Mason and Guo say for a period the got bogged down sifting through real and fake artifacts.
Making historical conclusions based on a forgery can take years to correct.
We wanted to see for ourselves just how widespread the fake jade industry is.
So we head to a local antiques market.
Filming with hidden cameras, it doesn't take us long to find vendors selling what they say is Hon San jade.
Some pieces are so good even Mason can't tell the difference from the real thing.
-This work impresses you? So whether it's a fake or not, we don't know.
We decide to press the seller further.
He sticks to his story.
We move on to other vendors selling jade.
At this one, they're honest about their items being copies.
And in the shop a couple offers advice on how we can profit from a purchase.
Through out the market, we find a mix of both good and bad copies.
Mason says the problem is there are few scientific tests out there that can prove what's truly fake.
That leaves experts relying on their own knowledge and senses.
So Mason, what did you think of what we saw inside here?
There seems to be so much uncertainty as to what is real or fake?
Well if you have enough experience you can say "Yes. 100% this is genuine. ancient"
But other scholars, collectors, or experts may disagree.
So there is a gray area? - Of course.
But for local construction millionaire Wong Dong Lee, there is no gray area when it comes to buying up the past.
Besides keeping exotic birds, Wong has gathered what he says is
the world's largest collection of Hon San period artifacts.
Like so many self-made millionaires, he likes nothing more than showing off.
And what better status symbol than to have your own museum?
Included are stones Wong says were used as musical instruments.
There's also a cave depicting life in this stone age culture.
Archeologists have raised doubts about his interpretation of the past,
along with whether his artifacts are real. He remains unfazed.
Many of Wong's relics have been authenticated by experts.
Still, he does admit to having been duped in the past.
Can you say with 100% certainty that all of your items here are real?
I did collect some fakes early on.
And I still have them stored away in a box.
They remind me to always stay aware.
But my collection on display now is 100% authentic.
While initially angry about being ripped off,
Wong says he's had a change of heart about those selling forgeries.
At first, yes, I was angry.
But then I realized that every person needs to survive,
and one sometimes one must do desperate things just to feed oneself.
In southeastern there is one place where producing forgeries is about more than just survival.
In Jingdezhen it can make you a fortune.
This city was once China's Imperial center for ceramics.
Emperor's would order the finest pieces of art in the world from the craftsmen here.
Today, 4000 workshops are still operating.
Most of the city, in fact, is employed in the ceramics business.
Everyday they spin out tens of thousandss of replicas from bygone eras.
But not all of it is legal.
The sheer size of the ceramics industry here is incredible.
It's estimated that beyond those doing legitimate artwork, there are thousands making forgeries.
So how long have you been collecting for?
Many years already. Collecting becomes my habit.
We meet up again with Mason's friend, William Zeng.
A former banker, Zeng's real love is Chinese ceramics,
and he's spent a fortune acquiring them.
When I acquire a piece of antique or when I want to acquire it,
I spend a lot of time to understand those objects and how they were made.
What's the meaning of it. The part of history it was made for. The functionality of it.
William agreed to join us in Jingdezhen,
to help us hunt down the underground criminal operations cheating the auction world.
We have to understand the objects before we know whether we are fools or we are not.
Every piece of ceramics, once it's created, is an art piece by its own right.
But I'm going to value the object as an art piece, or I going to value the object as a historical item.
So no one wants to be fooled.
To get in with the master forgers here, we'll need William's expertise.
Together, we hit the road.
It's taken some weeks to set up, but we've convinced one man
to show us what he says are high level fakes. We're off to meet him now.
We enter the narrow alleys of the city,
passing several ceramics workshops.
Where we're going requires us to use hidden cameras.
Eventually, by a blue-gated compound, we meet our contact.
We've told Jong we're collectors interested in buying fakes.
He turns out to be a government official working for the Culture and Relics Bureau.
He shows us an excavation site.
Next, Jong takes us inside to look over some of the relics that have been dug up.
What follows is hours of being toured around.
He takes us to another government site.
It's an ancient house where more real antiques are being stored.
We sense Jong is feeling us out to see if we're the type of collector he can strike a deal with.
Fortunately, William knows his stuff.
Finally, in the van, Jong opens up.
Then he reveals more.
Jong takes us to meet the forgers who claim to have made the fake vase,
which sold for hundreds of thousands.
Inside we find many pieces in different stages of production.
The workshop is run by 3 brothers.
The bring out a blue Qing Dynasty vase.
It's a prototype, they say, of the one auctioned off.
William is impressed by the quality.
The brothers claim their client brought an original in to have it copied,
and then sold the fake.
They show us a picture of a vase in an auction house's catalog.
We later confirm a red vase of similar shape and size was sold in a recent US auction.
It was expected to sell for $50,000 US.
But it went for more than $480,000 US.
The auction house didn't return our repeated calls for comment.
But their website says the vase came from a Boston estate.
The brothers tell us they regularly replace real items with fakes.
Jong feels they aren't fairly compensated for their skills.
Over the next few days we visit several workshops.
Modern day forgers use all types of techniques,
and chemicals to make pieces look old to fool the experts.
In this room full of Ming Dynasty knock offs
we're told it takes years to create a high end forgery.
Over tea, this man tells us how he sees his forgeries as honoring the art of ancient masters.
As a result, he tries to make them as close to the original as possible, no matter how long it takes.
While the forgers are eager to please,
they're also beginning to realize the potential value of their work.
Where once they simply took a fixed price, they're now demanding a larger cut.
That's their final pitch.
We leave, thanking them for their time.
The scope and quality of the forgeries has rattled us.
I think the moral of this visit is that I've got to study harder. I've got to see more.
I've got to learn better. I've got to make sure the source of those objects are genuine and clear to me.
It's still shocking, right?
It is. It is shocking.
* $131 million, lot 0002. Thank you both very much. *
Back in Hong Kong the buyers are as keen as ever.
The prized Imperial painting sells to an undisclosed US buyer for $15.6 million USD,
another record.
Sotheby's said it takes extreme care to assure forgeries don't make it into its auctions,
and it's confident fakes can be identified.
But they say in this complex market, clients must also educate themselves.
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