The Toronto Globe and Mail had a story last week on the thriving counterfeit art trade in China. According to the article, "a single town in the country's south churn[ed] out $120-million of artwork last year."
Interestingly, the day after the story appeared, the particular website it discussed pulled much of its inventory from the site, but of course the problem is much broader than one site:
"The counterfeit paintings are but one stroke on a larger canvas of artistic piracy in China, where DVDs, software and designer clothing are mimicked then sold for a fraction of their cost in Western stores. The Chinese government launched a major drive against copyright infringement last year, but the entertainment industry coalition, the International Intellectual Property Alliance, still named the country as one of the world's worst offenders in 2006 — sharing that dubious honour with Russia — for a problem costing more than $2.2-billion."