Microsoft chief executive Steve Ballmer today decried the use of pirated software by Chinese businesses.

"One of the things that has improved a lot around the world is business piracy, and yet when we look at China today business piracy is more extreme than consumer piracy," he told a business forum in Madrid.

"We are working hard with the support of the Chinese government to improve the situation but it is a real problem," the head of the world's largest software maker added.

The Business Software Alliance, a Washington-based trade group, estimates that 79 per cent of China's computers ran on pirated software last year.

It estimates the value of pirated software in China almost doubled to USD 7.58 billion (5.44 billion euros) from 2005 to 2009, the steepest increase in the world.

Microsoft says it generates less revenue in China than in India and South Korea, even though China's gross domestic product is twice that of the other two economies combined.

It blames the lack of progress in protecting intellectual property in the Asian giant for draining away potential revenue.