I apparently have a problem with getting meaningful scalebar values referred to a shapefile in QGIS. I think I tried all solutions suggested in other discussions, but still I don't get it. I use QGIS 1.8.0 Lisboa. The shapefile was downloaded from a reliable source (DIVA-GIS.org), it is a typical administrative areas polygon.
In case anyone wants to try it, here it is:
http://gadm.org/data/shp/CHN_adm.zip
When it was downloaded it came set with WGS84. I set the Project settings to: on the fly projection enabled, Project CRS WGS84/UTM ZONE 33N.
I set the layer CRS to WGS84/UTM ZONE 33N.
Then I "zoomed to layer" extent and added the scalebar: it reads 10 meters. Whole China seems to span east to west about 60 meters.
I also tried to "save as" the shapefile with WGS84/UTM ZONE 33N, got a new shapefile and the new shapefile behaves just the same.
There must be a mistake I am doing, but I can't find what.