A new class of homegrown millionaires is transforming the market for Chinese antiquities into a feverish bazaar. Behind it, Dorinda Elliott reports, are huge cultural and political implications—and (beware) some dubious values

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Beijing Curio City is a dilapidated, multistoried shopping mall on the city's exhaust-choked Third Ring Road. To get there, you drive past a landscape typical of urban China today: cranes and billboards advertising the latest high-rise complexes—CEO villas "fit for the most affluent executives" and Palais de Fortuna are just two examples.

Curio City is jammed with stalls selling crudely faked "antique" pottery, Mao buttons, and schlocky ink-brush paintings, as well as more refined objets that are—allegedly—old. I am there with my Chinese artist friend Wang Shugang, joking with a dealer of antique furniture. Wang is trying to swap one of his avant-garde sculptures—a life-sized squatting Beijinger painted in red—for a spectacular and authentic headless stone Buddha dating back to the Tang dynasty (a.d. 618–907). God knows how this piece got to Beijing or who knocked it off the hillside cave where it had stood for more than a thousand years. The dealer's not telling. She wants $45,000 for it—a steal, by Western standards, for a statue of such exquisite quality. "So when shall I send my guys over to pick up the Buddha?" Wang asks with an impish grin, tipping his baseball cap.

It seems like everybody in China is interested in antiquities these days, and I am trying to discover why. Wang and the dealer, Ru Jie, take me for a stroll through Curio City. "Hallo! Old!" a shopkeeper calls out as I walk by his pottery stall. I have been warned by Western friends that just about everything here is fake—after all, post-Mao China is expert not only in churning out counterfeit DVDs, Chanel handbags, and electronics but also in copying its own antiquities, everything from Qing dynasty porcelain to Ming paintings and two-thousand-year-old Han tomb relics. But, as the appearance of the headless Buddha coveted by Wang has hinted, this may not be true, and Ru confirms it: "Every shop here has real stuff. In fact, some of the most valuable pieces around the world came from here. But this is a secretive business. These shopkeepers won't show the most valuable things to you."

Any traveler tempted by the beauty of Chinese art and craftsmanship needs to be wary: There are many reasons, it turns out, for the merchants in Curio City to keep secrets. Ruthless competition, tomb robbery, the rise of a booming counterfeit industry, and the fact that the trade in ancient relics is driven largely by organized smuggling rings rank among them. Adding to the secretive atmosphere, the Chinese government, still smarting from the plundering of its treasures at the hands of colonial powers a hundred years ago, wants to halt the illicit antique-export business. Beijing has demanded that the United States ban the import of anything Chinese older than ninety-five years.