The cameras are easily hidden
The state-controlled newspaper said the cameras, which can be easily hidden from sight, were "selling like hot cakes" in south China's Guangdong Province.
Worries about the cameras even reached China's National People's Congress, where deputy Weng Weiquan called for laws to stop secret filming.
"Residents feel unsafe as this method has been used to expose aspects of people's private lives," he said.
Taiwan scandal
Spy cameras shot into public consciousness after one was used in Taiwan to film a politician having sex with her married lover.
Taipei City councilwoman Chu Mei-feng was forced from office after the film, which was made without her knowledge, was widely circulated.
She has since resurfaced as a pop singer, appearing last week in concert in Singapore.
Videos of her sexual performance, reproduced on to optical disks, have been selling well across China and other Asian countries.
China Daily said it found spy-cameras selling for between 100 yuan ($12) to 3,000 yuan ($360) in one Guangzhou shop.
"I wholesaled more than 400 micro-cameras last month," one dealer told the paper.
The dealer said some people were buying the cameras to oversee their spouse's activities, while shops and businesses were also using them as security devices.
For anxious spouses, the dealer recommended one wireless camera that was able to pick up signals within one kilometre.