Intellectual property piracy is a common problem throughout the third world countries and China has been one of the major offenders.  Rates of pirated software are dropping but more needs to be done.
In 2006, shortly before Chinese President Hu Jintao made a visit to Microsoft headquarters in Seattle, the Chinese government had issued a decree requiring all personal computers manufactured in China to come with a licensed operating system before leaving the factory gates.

Now, nearly two years later, Microsoft is seeing the benefits of more stringent intellectual property policies in China, with a decline in piracy rates and improved results at its "flagship" Windows division.