COUNTERFEITERS are defrauding China's Ministry of Railways of tens of millions of yuan each year. Groups of counterfeiters throughout the country are turning out millions of crudely forged train tickets which are then sold on the black market to prospective travellers, businessmen hoping to put a non-existent journey on expenses, or people trying to make money by ''returning'' their ticket for a refund. ''On most trains now, I would say up to five per cent of the tickets held are forgeries,'' a ministry official said. ''It is almost impossible to detect forgeries, particularly in hard-seat class, because tickets don't have seat numbers and they are usually so bent and dog-eared you can't make anything out anyway,'' the source said. Unlike currency or securities, train tickets can be counterfeited easily and it is estimated there are hundreds, possibly thousands, of backroom forging operations around the country, mostly in the east of China where there is the greatest concentration of railway lines. There does not appear to be a large organised network of forgers. However, the many small workshops make it difficult for police to eliminate the problem. ''As soon as one forger's shop is closed down, another springs up somewhere else,'' an official in the ministry's security department said. ''Besides, since each operation is so small, the police do not consider the forgery racket to be a major problem.'' Often the only way to catch the counterfeiters is for station staff to spot the forgeries. One such officer exposed a forging operation in Nanjing this month. Yang Jianlan, 47, alerted the authorities after a middle-aged man tried to get a refund for two Nanjing to Suzhou tickets priced at 12.50 yuan (about HK$17) when the real price for the two-hour journey was 10 yuan. The authorities raided the man's hotel room and discovered more than 400 fake tickets with a face value of 8,200 yuan.