The New York Times paints a picture of China’s art market as a world where newly rich bumpkins are misbehaving: “Purchasers of expensive paintings have been known to roll up their canvas, tuck it under an arm and stroll out into the night air.”

But the real obstacle to cleaning up the fake-filled, defaulting-bidder market is auction house that grew out of the army, Poly:

An industry study found that last year Poly had one of the worst records of buyers who did not pay, a persistent problem in the Chinese art market. When auction houses do not always note these failed transactions, as was the case with Poly, their reported sales figures exceed reality. The study found that Poly’s revenue was one of the most exaggerated among the top houses. And unlike major rivals, Poly has balked in recent years at allowing the auction trade association to publish full details of its sales. […]

“Individual buyers, they recognize us as part of the government,” said Mr. Zhao, who is 44. “They trust us, since we are part of the state-owned enterprise.” […]

For all of Mr. Zhao’s savvy and influence, though, it is Poly’s relationship with the state and the reach of its affiliated businesses that have fostered its ascension in the art world, experts say. They claim that, because of Poly’s ties to elites in the Chinese government, it enjoys greater freedom in moving cultural relics in and out of the country and more leeway from the tax bureau. Poly also can be more dismissive of recent efforts, led by the trade association, with the of commerce and culture ministries, to reform the Chinese art market, the experts say. […]

Unlike Guardian and other houses, Poly refused for the past two years to allow the auction association to publish data on the individual works whose sales had not been paid for completely. On top of that, the auction association’s studies ultimately found that Poly is increasingly struggling with a nonpayment problem. In 2012, for example, the association found that, because of nonpayments, only 34 percent of the sales Poly reported for works valued at more than $1.6 million each were actually completed by May of the following year.

By contrast, Guardian’s payment rate has improved, with 83 percent of sales completed last year, up from 53 percent.

A Culture of Bidding: An Art Power Rises in China, Posing Issue for Reform.