The credits were awarded in Mathematics and English under the auspices of municipal adult education programmes in Kristianstad and Båstad municipalities in southern Sweden.
"We are critical of Båstad and Kristianstad municipalities for having given final exams and issued credit to around 50 Chinese students, despite them neither having lived nor studied in Sweden," the agency's director-general Hans Albin Larsson said in a statement.
"The credits lack the legitimacy stipulated in regulations governing adult high school-level education in Sweden. The students' credits can thus be invalid when applying for a place at a Swedish university, for example."
The issue was brought to the attention of the agency by the National Agency for Services to Universities and University Colleges (VHS) on July 2nd.
VHS had reported Akademi Båstad and Vuxenutbildning i Kristianstad for issuing the high school equivalency credits.
The move is a direct violation of school law provision stipulating that schooling has to be undertaken within the country's borders.
The education bodies were also censured for not following clear and transparent guidelines for awarding credits to the Chinese students.
Furthermore the teacher responsible for testing the students in Kristianstad was not employed by the municipality at the time, also a contravention of the school law.
The Agency for School Inspection has given the municipalities until September 15th 2009 by which to account for the measures undertaken to address the criticism.