Once again, as it had been in its days as Songzhuzhai, the shop was heavily in debt and on the brink of bankruptcy. But after the founding of the People's Republic of China , and with the avid support of many artists and other cultural experts, Rongbaozhai was reorganized. In 1950, it became a public-private joint ownership company.

The 27-year-old Hou Kai, a former military officer, became the new manager of Rongbaozhai.

At the CPC's Eighth Party Congress in 1956, Chairman Mao Zedong set out a new policy: "Let a hundred flowers bloom, let a hundred schools of thought contend." Collecting art, far from being considered a bourgeois tendency, was encouraged. Rongbaozhai thrived once again, not only as a gallery of excellent art but also as a gathering place for famous painters and calligraphers.

Rongbaozhai was finally back on the right track.

  Collectors

One morning in 1964, a young man brought a package to Rongbaozhai and said that he wanted to sell it. When the shop assistant opened the package, his jaw dropped. Inside were more than 30 paintings and calligraphic works, many of them state-level cultural relics. There were pieces by Su Shi, a poet and calligrapher of the Northern Song Dynasty (960-1127); Fan Zhongyan, a prominent statesman, strategist, educator and writer of the Northern Song; and Mi Fu, one of the four most important calligraphers of the Song Dynasty (960-1279). The most valuable piece in the collection was the Shaoxi Poem Scroll by Mi Fu.

Zheng Maoda, who was a specialist in Rongbaozhai's history, said, "These works are important cultural treasures of the nation, and their value can't be measured in money. That young man asked for 1,500 yuan (US$181) for them, far below their actual value. But the appraisers knew from experience that if they gave him more than he asked, he would be confused or even scared, and might run off with the pieces."

Rongbaozhai bought those priceless treasures for just 1,400 yuan (US$169).

In the first half of the 20th century, China was in turmoil and its government frequently changed. The relics and treasures originally hoarded in the Forbidden City or nobles' mansions were scattered throughout the country.

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