Piracy remains a top concern for the Chinese software industry, although there are signs of improvement, a report released Tuesday by government and industrial agencies in Beijing says.

According to the Development Environment Report on China's Software Industry, piracy is the third biggest factor hindering the development of Chinese software companies after a lack of capital, and low technological and business management ability.

The report is based on a survey by the Intellectual Property Center under the Ministry of Information Industry and the China Software Industry Association.

More than 230 software firms, 270 organizational users and 1,000 individual users participated in the survey.

The survey shows 78 percent of the organizational users buy their software from either companies or professional vendors.

However, Zhao Tianwu, director of the Intellectual Property Centre and a mastermind of the report, said the situation was not that optimistic. The piracy rate is still quite high with only 27 percent of the respondents buying authorized copies and the rest very likely using pirated copies.

The piracy rate is still quite high with only 27 percent of the respondents buying authorized copies.

The survey indicates only 9 percent of software firms developing universal software, while the rest focus on enterprise or tailored software, bundled software with hardware, or develop Internet-based applications.

The good news from the report is that users' awareness is also improving. About 60 percent of the organizations surveyed agree that software procurement should account for more than 20 percent of the spending on information technology systems.

(China Daily June 30, 2004)