I came across a post on Xujun Eberlein's Inside-Out China blog which I think gives a great example of cheating in modern Chinese society. The post, entitled Who Is the Guilty Party?, is actually an English translation of a Chinese writer's description of a problem encounted when buying a house - the previous owner had been scamming the electricity company and the new owner found out that correcting the crime was much harder and more expensive than continuing it (even though the new owner wanted to do the right thing).
Of course, cheating in various forms exists almost everwhere in the world, but it does seem to be a very ingrained part of Chinese society. Maybe this is partly due the the fact that Chinese society, despite all its recent modernization, is still built on an ancient culture in which personal relationships (known as guanxi; 关系) take precedence over everything else. The ethical rule that stealing is wrong (and legal rule that follows from it) has little practical value in a society where you can get away with many things if you know the right person. The Western concept of the rule of law is a very alien concept to such a society. Whether its cheating on your electricity bill, cheating on college exams, buying and selling counterfeit products, illegally viewing and downloading music and movies or any number of other inethical and/or illegal behaviors, you do it as long as you can get away with it and because everyone else does it.
I'm probably a bit lucky working for a Chinese university, in that I'm insulated from a lot of the inethical situations I'd likely encounter and (like the poor homebuyer in the blog post's story) feel very uncomfortable with otherwise.