Corruption and dereliction of duty among local health workers and school staff are being blamed for the death of a school pupil after receiving an inoculation.
Around 200 students were also taken ill following injections in Sixian County in east China's Anhui Province.
The Beijing Times claims a deal between health providers and schools over vaccinations allowed them all to make money.
The newspaper says a recent investigation by the Sixian County government found that students were paying over the odds for the injections.
Instead of being charged the usual 6 yuan (US$0.72), 2,500 pupils were charged 25 yuan (US$3) for a Hepatitis A vaccine.
The schools, 19 in 17 villages, were given 1 yuan (US$0.12) commission per vaccine, the Dazhuang Township Healthcare and Epidemic Prevention Station, which sold the vaccines to the schools, kept the rest.
From the deal, each school earned 2,500 yuan (US$300), and village doctors who vaccinated the students were offered a bonus.
The Beijing Times also claims that some doctors were not qualified to give vaccinations, and had not received any training.
The vaccines initially came from a medicine producer in Hangzhou, capital of east China's Zhejiang Province.
Following the incident, the Sixian Public Security Bureau and the county's Drug Administration Bureau sent an investigation team to Hangzhou to check out the firm. They have not yet reported their findings.
It is not yet known exactly why the students became ill after receiving the vaccinations, said Wang Zhen, a spokeswoman for the county government.
The vaccines could have been contaminated during transportation.
To save costs "the vaccines were not kept cool during their journey," according to the local Drug Administration Bureau.
Also under investigation is a private medicine supplier called Zhang Peng, based in Chuzhou, Anhui Province.
Some of the vaccines given to the children are thought to have been supplied by Zhang, who did not have a licence to sell medicine.
Police are looking for Zhang, who disappeared after the accident happened.
Three health workers have also been arrested in connection with the case.
Meanwhile, 200 students are still in hospital for further observation.
No more deaths have been reported, and 20 seriously ill pupils were in a stable condition, said Wang Zhen.
"After the death of the student, we organized free physical check-ups for all vaccinated pupils," she added.
(China Daily June 28, 2005)
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