BEIJING (AFP) - A Chinese museum has been ordered to close after thousands of its historical exhibits were found to be fake, state-run media said on Thursday.

Police shut down the Lucheng Museum, in the northeastern province of Liaoning, after finding that almost a third of the 8,000 items on display were not genuine, the Global Times newspaper reported.

Counterfeits on show included a sword touted as dating from the Qing Dynasty and worth 120 million yuan (S$24 million), the report said.

China is on a museum building spree, with 299 new establishments registering last year, according to state media.

But its antiques market is said to be rife with fakes, posing a problem for the country's growing ranks of private collectors.

A Chinese tycoon who has two museums is embroiled in a row with experts from the state-backed Shanghai Museum over the authenticity of a scroll he paid more than US$8 million (S$10 million) for at a Sotheby's auction in New York.

Separately, last year a museum in the central province of Henan was found to contain scores of fake exhibits, including a vase decorated with cartoon characters but described as a Qing dynasty artefact.

Pictures posted by the state-run China Radio International (CRI) showed the vase decorated with bright green cartoon animals, including a creature resembling a laughing squid.

"Similar fake museums are found in many places in China in search of monetary gain," CRI quoted Chinese antiques expert Ma Weidu as saying at the time.