In south China police have seized 105.5 million yuan (US$ 13.4 million) of counterfeit banknotes and eight people have been arrested. 

A statement from police in Heyuan City, Guangdong Province, said all the banknotes had a face value of 100 yuan (US$ 12.7).

The police also seized printing machinery and 31 fake banknote negatives at a local plastic manufacturing company and a hotel room.

The police said the notes could have flowed onto market and disturbed financial order within three days.

Ye Yingnan, director of the anti-counterfeiting office of the State Council, said in May last year that law enforcement officials confiscated counterfeit banknotes with a face value of 1.16 billion yuan (US$ 147.8 million) in 2004.

Ye, also director of the finance bureau at People's Bank of China, said more than half of the notes were produced in Guangdong.

(Xinhua News Agency November 28, 2006)