Police in Guangzhou said they busted the counterfeit ring in June, arresting 14 suspects and shutting down six underground workshops operated by the group.

The report did not explain the delay in announcing the raid and the seizures.

Officers confiscated more than 11,000 bags and suitcases with the "LV" logo, along with a quantity of unfinished LV-branded leather products that could be worth 1 billion yuan if sold in a finished state as genuine items.

Police also found 27 machines and 30 million LV logos. The suspects even launched a replica Louis Vuitton website and used it to target overseas consumers. According to police, factories making counterfeit luxury leather goods are common in Guangzhou's Baiyun and Huadu districts as well as in nearby Dongguan .

One former manufacturer of bootleg luxury bags told the newspaper that he had been a VIP customer of the luxury brands whose products he imitated and so could be among the first to buy the goods when they arrived in store. He would buy real bags, then pull them apart and enlist leather factories to reproduce them before assembling the fakes at a much lower cost than the genuine article.

According to the "China Luxury Market Report" by the Shanghai-based Fortune Character Institute, mainland consumers bought US$74 billion of luxury products overseas last year, well above the US$50 billion they spent in 2011.

The report said many people who were keen on luxury products but could not afford them would buy high-quality copies.

Last month, a counterfeit luxury watches syndicate was busted in Luohu district, Shenzhen, with 2,600 items that could fetch an estimated 5 million yuan if sold at the same price as the genuine items. Police said the watches came with a complete set of fake packs, certificates and invoices, the S reported.