I am undecided about the credibility. Some posters with good reputations for being correct on rumors have said this is just art.
In terms of design improvements over the Type-03, one I can spot immediately is the raised iron sights, which let the barrel be in line with the stock. Another difference on the standard model is the lack of a noise reducer, probably due to a longer barrel.
What I find odd is that it is designated 06-1, which implies there is an 06 or 06-2.
To me the gun in the pic look more like an AK M4 hybrid. I think what they are trying to do is (if it is real) make the stock align with the barrel height and probably make it more "Modular" where you can put forward hand grip, and accessories for the weapon.
Hmm quite nice gun designs, still retaining some Type 81 design layouts, but more suprising is the change in magazine. Switching from AK magazine to STANG magazine style. Would be nice if a pictionary rail was added on the top, for accessories, removable peep sites, optics, carrying handle, etc...
Designs of the left, one seemed to be based of RPK, and the other SDM rifle such as the M16A2E3.
These rifles would be great for PLA border troops.
I recently found a picture of Chinese Special Police using the HK G36C rifle on military.china.com, but can't find the picture anymore. How did the Special Police acquire the G36C with the arms embargo and why would they want that instead of the Type 95/ QBZ-95? Would the G36C in the Special Police be chambered for 5.8mm or 5.56mm ammunition? Maybe it's an illegal copy or a Type 06 carbine with a similar design as the G36C?