China has made remarkable progress in the fight against software piracy during the past few years, but the country still faces an increasing threat from pirated software, according to a US industry organization.

The Business Software Alliance (BSA), which represents more than 40 technology companies including Microsoft and Apple, said China could do more by intensifying anti-piracy efforts, which will not only benefit foreign software firms but also the Chinese economy and companies.

Robert Holleyman, president and chief executive officer of the BSA, said he was encouraged by the government's recent efforts in combating software piracy.

"China has made substantial progress in the fight against piracy during the past few years," said Holleyman.

However, he said the major issue concerning piracy in China is no longer the lack of intellectual property rights (IPR) legislation, but in the implementation of the laws and regulations.

In November, the country launched a six-month campaign to crack down on IPR violations. As part of the new push, the country will inspect central and local government computers to ensure that all departments are using copyrighted software.

Vice-Premier Wang Qishan, who is leading a Chinese delegation for the annual trade summit between China and the United States, told a BSA delegation in November that the government will pay great attention to IPR protection and will unswervingly protect those rights in the future.

According to research jointly conducted by market intelligence firm International Data Corporation (IDC) and the BSA, the piracy rate of China's personal computer software reached 79 percent last year, 1 percentage point down from 2008. But the estimated losses to the industry hit $7.6 billion, doubling the figure from four years ago. The increasing losses were mainly due to surging domestic sales of new personal computers and software.

"China's PC market has seen tremendous growth during the past few years but the software industry, including both domestic and foreign software companies, is still facing a great threat from pirated software," Holleyman said.

He said although foreign software companies will benefit from a reduced piracy rate, "most of the benefits will be left here in China".

Holleyman also said that he hopes China will increase punishments for companies using pirate software in the future.

IDC estimated that a decline of 10 percentage points in the piracy rate would see the country's GDP increase by $21 billion and the creation of 250,000 new jobs.

China has intensified legal efforts against piracy recently. Earlier this year, the US software giant Microsoft won two landmark copyright infringement lawsuits against a chain of Internet cafe businesses and a domestic insurance company. The latter case alone helped Microsoft win compensation of 2.17 million yuan ($325,000).