My SIL is from China and she always uses one of those prepaid calling cards that you can buy at the store. She says the rates vary from card to card so you need to check that but the rates are always better than what she would get from the phone company.
In my experience, cheap calling cards usually charge connection fees, maintanance fees, etc. So, you kinda have to use them up soon if you don't wanna lose the minutes.
The more expensive ones tend to be better!