Alibaba DOES remove fraudulent sellers. Removing them is not a one time occurrence; Alibaba does this on an ongoing basis. So does eBay. No marketplace can every get rid of them all, because when you get rid of one, all too often, another pops up to take his/her place. But marketplaces like Alibaba, like eBay, or any other are--have to be--constantly working this issue to remove them.
There are a couple of links on the Alibaba site that have a lot of information about this topic. First, they have a page devoted to safe buying (and selling) located here. This page has a great deal of information on it including topics. I'm not going to list them here, but I encourage everyone interested to read it.
Alibaba also maintains a Trade Disputes Complaints List that you can find here that lists companies that they have received complaints against, the industry that company is in, how many complaints, and what the account status the specific (e.g. active, canceled) is.