The case has highlighted rampant copying and faking in China and the challenges the country faces as the government pushes scientists to help it move from a manufacturing to an innovation-based economy.

State media announced Friday that Chen Jin had been sacked for falsifying research into the digital signal computer chips, seen as an important step in helping China wean itself off reliance on foreign technology.

"If there is a criminal investigation we will announce it," a spokesman from the Shanghai city government told AFP. "But as of now, there's no such information."

Chen, who was dean of the micro-electronics school at Shanghai Jiaotong University, was fired after a two-month investigation found he and his team conducted fraudulent research, the Xinhua news agency reported.

It said an inquiry had determined that the Hanxin I, a simple digital signal processing (DSP) chip developed by Chen, could not play MP3 files or verify fingerprints as he had claimed.

University officials and other government departments refused to comment. But in a statement on its website, the university confirmed Chen had been sacked.

It said Chen used another company's research and claimed it as his own, but did not identify the company. The New York Times said it is a foreign firm.

The case is sending ripples across China's high technology community, with members posting comments expressing shock and outrage on Internet chatrooms.

"This has brought shame to Chinese people. This is not an isolated incident," one person wrote.

It was not immediately clear what impact the case would have on the government's method of promoting technological development. Beijing has aggressively funded research projects, but analysts said it has not always scrutinized their quality or authenticity.

Returning to China after earning a Ph.D from the University of Texas, Chen was considered one of the nation's best young scientists.

In 2003, at a press conference by him and the Shanghai government, and attended by Shanghai's vice mayor, to unveil the Hanxin chip, he was hailed as a "New Long March Pioneer" for creating one of China's first digital signal processing computer chips.

He received orders for one million chips which are used for MP3 players, PDAs and household appliances, state media said.

China had hopes of developing its own high level chip to minimize purchases of foreign chips. About 83 percent of the chips sold in China in 2004 were imported.

The market is huge and expanding fast. In the first half of 2004, China's chip market reached 137 billion yuan (17 billion dollars), a 36 percent increase from the first half of 2003.

Authorities began investigating Chen, 37, after one of his colleagues blew the whistle last December.

Chen had managed to deceive appraisal teams from the university, Shanghai government and relevant central government ministries which invested public funds in his research.

The government has banned him from conducting further state research and ordered him to give back investment money, Xinhua said.

China has placed high hopes on overseas-educated returnees such as Chen to help the country move from a low-cost production base to an innovation-driven economy.

Fraud and copying are widespread in society, from piracy of consumer items to plagiarism by students and professors faking academic research.

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