Jodi Xu writes (in a post picked up by Time’s China blog):
Today’s morning news announced that half of Beijing’s bottled water is counterfeit. I was shocked. Illegal private factories fill the used plastic bottles with tap water or water being briefly filtered. The lids and sticks that they use to seal the bottles were purchased through some illegal channel. They look identical to the genuine ones. Without the bottles being sterilized and water being tested to the standard, the exceeded number of mold fungi and colon bacilli that found in such water can easily make the drinkers sick.
This is why your correspondent has always recommended drinking the tap water in Beijing: at least you know where it comes from.
See also this recent Danwei post: At long last, drinkable tap water?