"For this study," the report reads, "IDC used proprietary statistics for software and hardware shipments gathered through surveys of vendors, users, and the channel, and enlisted IDC analysts in more than fifty countries to review local market conditions."

Piracy continued to worsen in the Middle East and Africa, leading the worldwide piracy rate to remain fixed at 35%. Despite this stagnation, the BSA report notes that the aggregate global loss from piracy has increased due to the continued growth of the software industry. For example, while maintaining a relatively low percentage of piracy at 21%, the United States accounted for over $7 billion in losses to the entertainment and software industries in 2006.

Estimates place the amount saved by the Chinese reduction at $864 million. "Considering the vast PC growth taking place in the Chinese IT market, this continued decline in China's software piracy rate is quite promising," BSA president Robert Holleyman said.

The study comes on the heels of a heated trade dispute over piracy between the United States and China. US representatives had issued two complaints to the World Trade Organization in April, lambasting China for not taking enough steps to counteract the piracy of US media. "Piracy and counterfeiting levels in China remain unacceptably high," United States Trade Representative Susan C. Schwab said.

A Reuters story covered the Chinese response, reporting that Vice Premier Wu Yi told an intellectual property forum, "The United States Trade Representative, the USTR, has totally ignored the massive strides China has made."

"Over the last few years, the amount of manpower and work that China has put into protecting intellectual property rights and the results that have been achieved, have been unprecedented," she said.

Despite this apparent progress, China still remains a major hub of piracy. For every five copies of software obtained in China, four are illegal copies, which amounted to over $5 billion in losses during 2006--second only to the United States.