Cash-flush Chinese are casting their eyes in the direction of a new form of investment. The art market is attracting increasing attention, lining up behind real estate and the stock market in the hunt for dividends. However, disputes arising from selling and buying fake artistic works are increasing in frequency in auction business circles due to the exemption clause in China's Auction Law.

According to the law, provided both the auctioneer and the seller state they cannot guarantee the authenticity of the artistic work, they are freed from accountability if the artistic work is discovered to be a fake after it has been sold by auction.

Whether the clause is reasonable and needs to be amended have caused hot debate recently since the Second China Artwork Collection and Appreciation Summit Forum was held in Hangzhou, the capital city of east China's Zhejiang Province, on November 18, 2010. On the forum, a well-known painter, who asked not to be named, claimed that the exemption clause in the current Auction Law is protecting the interests of the auction house.

Those in favor of amending the law believe that the exemption clause goes against the legislative principle for being honest when doing business and infringes on consumers' interests. However, other people maintain the law is reasonable with the view that the transaction in the auction trade is different from that of other commercial deals and should follow different rules.