The Financial Times adds another wrinkle to the mysteries of the Chinese art market. One of the two defaulting buyers Sotheby’s named today was also acting as a conduit to one of the country’s art exchanges where fractional shares in paintings are sold. The extraordinary prices the bidder paid for the Zao Wou-ki painting she defaulted on raises the possibility that auction prices in China are being bid up to establish public prices for art exchanges:

On October 3, Ren Chunxia, a woman with an address in Jinan, eastern China, won two oil paintings by the Chinese master Wu Guanzhong with bids of HK$18.6m and HK$26.4m respectively. […] The two […] paintings were sold to a new owner within days of the auction and listed on the Taishan art exchange at prices more than 30 per cent higher than the sums Ms Ren paid in Hong Kong, local reports said.

Late last year, Chinese officials cracked down on a variety of illegal exchanges, including some art exchanges similar to the Taishan exchange. The Taishan art exchange was not closed. Here’s the Financial Times from November:

Beijing-based Hantang Artworks Exchange, where investors could trade shares in precious artworks owned by the exchange, announced on its website this week that it was halting all trading immediately “in the spirit” of the orders from the State Council.

More than 30 similar art exchanges have sprung up in the last few years but most do not appear to have been very successful and some have been mired in scandal and accusations of fraud from the outset.

Chinese Art Bidders Named in Payment Dispute (Financial Times)

China Cracks Down on Rogue Exchanges (Financial Times)