The Chinese Ministry of Finance has suspended accountants at Hubei Lihua Accounting Firm, saying the firm fraudulently misrepresented and falsified various financial reports of four client companies.

One of those involved is Xiangyang Automobile Bearing Co. Ltd. Hubei Lihua allegedly falsified the company's earnings reports.

The ministry's move is part of a crackdown on what is perceived as widespread corruption and accounting fraud in companies trading on China's Shanghai and Shenzhen stock exchanges.

Many investment analysts, however, believe the punishments so far have been too mild to provide any real stop to the practices.

The Chinese Institute of Certified Public Accountants, along with the Chinese Ministry of Finance, promise further action and stronger penalties in cases of accounting fraud and misconduct.

Xiangyang trades on the Shenzhen Stock Exchange and was added to the Dow-Shenzhen index in October 2000. The market value of the companies on the Dow-Shenzhen Index account for 80% of the total market value of the exchange.

The company is China's largest manufacturer of automotive bearings, producing approximately 23 million bearings per year. Xiangyang is a state-run company, employing approximately 6,000 workers.