An investigation by the US news channel CNN found that the University of St. Regis, a suspected diploma mill, sold fake diplomas to 9,600 students from 131 countries, generating about $7 million in profit for the organizers.

With the intense competition for jobs, not just in China but across the world, the need for top-class credentials has never been greater, a fact experts say has fueled a major increase in the number of diploma mills over the last decade.

"They don't need large scale publicity campaigns. The increasing demand allows owners to run them underground," said Sang.

The attention surrounding the "fake PhD" accusations against Tang, a man regarded as one of the most successful managers in China, also seems to have created even more opportunities.

Intense competition

Statistics from the Ministry of Education show 229,300 Chinese studied abroad last year, an increase of 49,500 on 2008.

Facing a bleak labor market, more graduates believe a foreign education background will help them land their dream job, like Wang Xuebing, 22, who graduated from Huaqiao University in Fujian province.

"I'm sure that with a foreign diploma I could be more competitive than my domestic peers," he said. "Besides, graduate study in Britain lasts less than a year sometimes, while ones at domestic universities last two.

"I don't want to waste my precious youth on (getting a diploma)," he added.

However, Wen Yueran, a professor at Renmin University of China's school of labor and human resources, warned that diplomas do not necessarily equal ability.

"Diplomas are just labels that suggest what you are capable of the job," he explained. "If Tang really fabricated his education background, he should admit it and apologize to the public. He doesn't need a certificate to prove his ability as he has already succeeded in business."

People are fastidious about certificates and background but do not have the patience to allow others to prove themselves, said Wen, adding: "People gamble with their reputation as they know in most cases they will win with little cost".

"The diploma mill is a win-win business, except for the people who save money and really want to learn something abroad," Sang said.