Sit in Front of Taxi
My strategy here in Guangzhou is to always sit in the front of the taxi, regardless of the signs they have prohibiting it. This is the single most important thing you can do in China to avoid getting fake bills from cabbies. That way when I pay I can see everything the driver is doing with the money. Here in GZ they mostly have the "steel cage match" type bars separating the back and the front seating areas so its easy for the drivers to switch money on unsuspecting passengers.
My girlfriend has had it happen twice when sitting in the back, I've never had it happen and I always sit in the front (no matter how excruciatingly uncomfortable it is!). The trick they used on her last time was to accept her hundred, then give it back saying its fake. She, initially offered a real one, the guy somehow switched it and gave her the fake back. A real sneaky dude!