Is there counterfeit money in China? If yes, how can I distinguish the real one from the fake one?

Yes, like any other kind of money, there is conterfeit money in China. Our government is cracking down on it, but you still need to be aware of this, especially when you try to buy things from those street vendors.

The ways to identify fake money are by the color, the watermark, the paper, and the braille dots:
The color of RMB notes is hard to imitate, and counterfeit bills are usually too fuzzy, that is, the images and colors are not so sharp.

The watermark on counterfeit money is also not clear. On real bills the outline of the model worker or the Great Helmsman (on the 100 bill of the old copy) or Maozedong (on the new copy) is fairly distinct. The way to test the paper is to look at it under a black light. Originally, the way to tell real from fake was to see if the words “YIBAI” or “WUSHI” (depending on the denomination) appeared in fluorescent letters under the light. But the counterfeiters have found a way to imitate this. Now the true test is to see the color of the paper itself under the black light. If the paper appears bright, then it is fake. If it appears to absorb the black light, then it is real.

The final test is the dots. On each denomination of the yuan notes (nobody bothers making fake jiao, not to mention fen), there is a corresponding number in braille in the lower left hand corner of the front side. It is hard to feel, but the dots are slightly raised on the surface of the paper. If they are not, then it is also a fake.