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The pirated software sold on Chinese market accounted for 24 percent of the value of the country's total software industry in 2006, down two percentages from that in 2005.

The turnover of China's software sector in 2006 reached 480 billion yuan (US61.5 billion), said an annual report on China's software piracy, according to a press conference on Monday.

The report was based on studies carried out by Chinalabs, a leading domestic internet research institute. In 2005 the State Intellectual Property Office tasked Chinalabs with researching software piracy.

It attributed the decline to the robust growth of free software, a continuous government anti-piracy campaign, and the development of competitive domestic IT companies, producing reliable and affordable software products.

Ye Xiumin, a researcher with Chinalabs, said the report is more accurate than estimates by some international organizations which mistakenly count free software as counterfeit products.

She cited a 2003 estimate by The Business Software Alliance which claimed that the piracy rate in China was as high as 92 percent.

"We have deducted free software from the research pool to make sure the results reflect the true piracy situation in China," Ye said.

Industrial data, polls and expert estimates were used to systematically calculate piracy rates, she said.

Piracy has been a bickering issue between China and the United States. Washington last month filed World Trade Organization complaints against Beijing, over copyright infringements and restrictions on the sale of US books, music, videos and movies.

China criticized the move, saying much of its painstaking efforts to tackle piracy and its remarkable progress were ignored by the United States.

Last year in China more than 73 million pirated products, including 3.79 million software discs, were confiscated. The Chinese courts also lowered the threshold for prosecuting manufacturers and vendors of counterfeit intellectual property products.

Anyone who manufactures 500 or more counterfeit copies (discs) of computer software, music, movies, TV shows and other audio-video products can be prosecuted and face a prison term of up to seven years.