Forgive me if this has been posted somewhere here already, but I just found this link on a UK Coin forum. Interesting but depressing to see how they do it: http://coins.about.com/od/worldcoins/ss/Making-Counterfeit-US-Coins.htm
I believe that Coin World was the first to interview one of the Chinese counterfeiters about 8 years ago. It was a 2-part interview with the owner of the Big Tree Mint in Shanghai. The sad part of it was that the equipment he used was originally donated to the Chinese government by the US Mint about 1920. Chris
The Coin World article points out that the US Mint sold surplus equipment to China in 1920, and that equipment was sold as scrap in the 1950s. However, there has been no documented evidence that the "Big Tree" mint (or any other mint) is actually using any of that surplus US Mint equipment. The pictures that I saw of Big Tree Mint show a press which is definitely not a US Mint type. So I personally do not think that surplus US Mint equipment is being used in China for counterfeiting purposes.