The Ministry of Public Security will reopen a department to fight the growth of fake bank notes across the country.
The ministry will also allocate 10 million yuan ($1.6 million) to fund major investigations into fake notes and provide rewards for tips and outstanding police officers.
China launched the nationwide crackdown after a number of "highly-realistic" notes created panic in some cities early this year.
Jing Bo, an art editor in Chaoyang district of Beijing, was recently faked out by two 100-yuan notes with serial numbers TJ55 and HB90. The latter was a serial number found in more than 10 provinces and municipalities.
"I wasn't aware of getting the fake notes. The first one was change from a store and the other one was given by a taxi driver," he told China Daily yesterday. "I usually take it for granted that bills are real, but I won't use this 'money' because it's fake."
Police said the fakes are hard to distinguish from real bills, but officials from the People's Bank of China say that as long as people look carefully, fake notes can be discovered by naked eyes.
Vice-Minister of Public Security Liu Jinguo told a television conference that the crackdown will concentrate on Guangdong, a province where more than half of the fakes are produced and seized. A professional team comprised of police from major counterfeiting areas including Henan, Hunan, Anhui and Zhejiang provinces will be set up.