BEIJING -- Late last fall, a village official visited Wang Jicheng, a poultry farmer in the northern Chinese province of Liaoning, to warn him that chickens in the area were dying by the thousands, probably from bird flu.

Mr. Wang wasn't too worried; a month before, he said, he had paid $225 for 28 bottles of condensed vaccine to protect his chickens and had spent 2 1/2 days injecting each of his 10,000 birds.

But the day after the official's visit, Mr. Wang saw three-wheeled bicycles ferrying bags of bird carcasses past his farm to a bonfire to be burned. Then his own poultry began to die. Within a few weeks, all of his chickens had died or been slaughtered to prevent the spread of the disease.

It turns out that Inner Mongolia Biopharmacy Co., the small maker of the avian flu vaccine that Mr. Wang bought, had no license to manufacture the vaccine and was making a low-quality product, according to the Chinese Ministry of Agriculture. About five weeks after the epidemic hit in Liaoning, the government announced the arrest of six of the company's executives and ordered the firm to stop making the vaccine. The executives are still under arrest, and the company's 1,300 workers are sitting idle while the company awaits approval to resume operations.

An official at Inner Mongolia Biopharmacy says the company has recalled its vaccines and admitted its bird-flu vaccines were unauthorized, but says tests have shown that the vaccines weren't the cause of the outbreaks in Liaoning.

From CDs to cars, China is famous for the counterfeit goods that flood its markets. The government has wrestled with the problem, sometimes reluctantly and often with mixed results. Sprawling production chains and the sheer size of the country make it difficult to rein in producers of counterfeit products.

But with avian flu threatening the livelihood of millions of farmers -- and possibly many human lives -- the need to put on the brakes has a new dimension. Fake or substandard avian vaccines could not only leave millions of birds in China unprotected, but also jeopardize efforts to fight the disease world-wide.

Late last year, China's Ministry of Agriculture announced that 13 companies, including several government-supported research institutes, had been punished for peddling vaccines without a license. The companies have been fined and had profit confiscated in certain cases, according to the government. Dozens more are being monitored. The government has authorized nine companies in China to produce bird-flu vaccines, which Beijing says are now distributed free of charge to farmers by local veterinary stations.

It is hard to tell how many unauthorized labs are making vaccines. But some international health officials, including some who have traveled to China to inspect vaccine-production facilities, have been warning for more than a year that the number of authorized vaccine makers in China was insufficient to meet the country's demand. Those officials suspect that unlicensed makers have been filling the gap with unauthorized and low-quality antidotes.

In the past couple of months, the government has begun to act, moving against manufacturers like Inner Mongolia Biopharmacy, issuing warnings to farmers about the risks of using unauthorized vaccines and announcing new controls.

Fake vaccines, like counterfeit pharmaceuticals for humans, often contain some of the active ingredients found in the regulated product. But it is tough to make vaccines that provoke just the right immune response, and the unlicensed manufacturers, eager to fill a growing demand, often cut corners in what is a complex production process or simply churn out shoddy vaccines. Almost 2,200 batches of the vaccine were found to be substandard as of November.

In February 2004, the China Institute of Veterinary Drug Control began printing holograms to be affixed to bottles of approved vaccine to prove their authenticity, and it has issued more than eight million holograms around China.

"It's good that China has finally recognized fake vaccines," says Yoshihiro Ozawa, an animal-disease expert and adviser to the World Organization for Animal Health, based in Paris. The question is, can it move quickly and broadly enough?

Bird flu has decimated flocks from Thailand to Turkey and has killed nearly 80 people, and possibly more, since 2003 -- people who almost certainly contracted the disease directly from birds. The fear is that the virus will mutate to a form that can easily spread from person to person, igniting a pandemic.

Because a human vaccine is still in the works, avian vaccines are a critical tool in this global fight. Done right, avian vaccination is highly effective, say global health authorities. Limiting the spread of the virus can mean fewer sources of human infection. That in turn means fewer opportunities for the avian bug to swap genes with a human virus that might help it become readily transmissible among people.

Avian vaccination also protects an industry that is critical in a country like China, where hundreds of millions of farmers, often living among chickens and ducks, depend on birds for their livelihood and as a relatively inexpensive source of protein. The Chinese government has committed itself to vaccinating every one of its billions of domestic birds -- agreeing to pay for the vaccines while allowing the farmers to vaccinate their own birds.

Beijing says it is ramping up vaccine supply from approved manufacturers. Zhuo Baoshan, general manager of Jinan-based Qilu Animal Health Products Factory, one of the authorized vaccine makers, says his company is now producing the vaccine at full capacity and shipping product every other day. "We need to report our daily output to the ministry, which has sent people here to test every batch of vaccines," he says.

But it isn't clear whether these efforts are enough. Meanwhile, unlicensed vendors approach local officials who in some cases aren't savvy enough to know the difference between approved and unapproved products, or how a vaccine works. In the case of Inner Mongolia Biopharmacy, price may have been a factor in farmers' vaccine purchases. The company's bird-flu vaccine was being sold for less than the standard vaccines that had been approved by the government.

A proliferation of fake vaccines could compromise other progress made in fighting bird flu. Inferior vaccines, like those sold in Liaoning, gave Mr. Wang -- the poultry farmer who vaccinated his chickens to no effect -- a false sense of security and may have conferred no protection at all on his flock. Poorly made vaccines can even cause infection, if the vaccine is made from a virus that isn't completely inactivated.

One fear shared by some disease experts is a vaccine that offers just enough protection to prevent birds from having -- or showing -- symptoms of the disease, but not enough to prevent infection outright, allowing them to spread the disease undetected.

China isn't alone in trying to stamp out low-quality avian vaccines. When outbreaks of bird flu swept across flocks in Indonesia in 2003 and 2004, farmers there were found to be injecting their birds with locally produced vaccines that failed to stimulate a strong enough immune response, according to agriculture officials working in Jakarta.

International and local agriculture officials working in Indonesia say the problem has largely been brought under control by tighter oversight and regulation. Two major Indonesian vaccine makers now make much of the supply, in addition to vaccines imported from France and elsewhere.

Mr. Wang says if his chickens had lived, he could have sold each of them at the local market for the equivalent of $2.35 apiece. "We were very upset with the vaccine company," he says. "It has wasted us so much money and time."