If bogus drugs cause serious deformities or bodily harm to more than three people or slight injury to more than 10 people, the death penalty or a life sentence would be applied.
China says the harshest penalties will be given for crimes during natural disasters or emergencies.
The draft guidelines were released by the State Food and Drug Administration.
The organisation's former director was executed in July for corruptly allowing the approval of faulty food and drugs. © 2007 Australian Broadcasting Corporation