The bogus buns were exposed in a report carried on China's state-run television network CCTV.
The CCTV reporters found vendors chopped up waste cardboard and mixed it with fatty meat to produce the buns, known as "bao zi", in a Beijing backstreet factory.
The bun expose highlights the uphill battle faced by authorities in the wake of a series of safety alerts over Chinese made products.
In recent weeks new examples of dangerous or below standard Chinese products have come to light on an almost daily basis – from toxic toothpaste to children's toys painted with lead-based paint.
The series of alerts has sparked a media outcry in China and calls for greater controls on Chinese exports abroad.
In the case of the fake buns the CCTV reporters used hidden cameras to show the lengths the bao zi producers were going to in order to cut costs.
To get the right consistency the cardboard was shown being soaked in caustic soda, a poisonous industrial solvent.
The owners told the reporter they then mixed it with about 40 per cent fatty meat and the flavour enhancer monosodium glutamate before selling the bao zi in nearby markets.
Despite discrepancies in colour and texture, the bun makers - who were shown wearing little more than boxer shorts and flip-flops - said they did not believe customers are able to tell the difference.
"Do you eat them?" the CCTV reporter asked the factory owner.
"No, I don't eat them," he replied.