"It's fair to say China has made some very important policies that benefit the software industry," said Jeffrey Hardee, vice-president and regional director for Asia with Business Software Alliance (BSA), which represents 27 international member companies, including Microsoft, Adobe and IBM.

An IDC report contracted by BSA said China's piracy rate of packaged software was 86 percent in 2005, down from 90 percent in 2004. Figures for 2006 have yet to be released.

Microsoft Senior Vice-President and General Counsel Brad Smith said earlier this month that 2006 was "the most important and encouraging year for software protection" in China.

An officer with the Delegation of the European Union to China also agreed the country has made progress reducing software piracy, but he urged the world's second-largest computer market to strengthen law enforcement and expand the breadth and depth of the efforts to go legal.

The BSA's Hardee said the nine government agencies adopting legal software should set up an implementation plan to ensure the effectiveness of the process.

He also suggested an audit system be put in place, so software can be verified to build incentives for companies to use legal copies.

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