Foreign PC makers will also be affected by the new rule

New regulations state Chinese computer makers must install legally licensed operating software on machines before they leave the factory.

The announcement followed trade talks between China and the United States in Washington on Tuesday.

In 2004 the rate of software piracy in China was 90%, compared to 27% in the UK and the world average of 35%.

The new rule was jointly announced by China's Ministry of Information Industry (MII), the State Copyright Bureau and the Ministry of Commerce.

"Computers manufactured within the country's borders should have pre-installed authorised operating software systems when they leave the factory," the statement said.

Foreign PC makers will also be affected by the rule, which says retailers must install software on imported computers before they are sold.

Manufacturers and operating system providers are also required to report the number of computers sold and systems installed to the MII by February each year.

Those who breach the rules or provide false information would be investigated and have their names made public, the notice added.

Foreign pressure

American software firms said they wanted to see progress on the issue during the US-China Joint Commission on Commerce and Trade meeting, which was held ahead of Chinese President Hu Jintao's trip to the US next week.

But Wang Ziqiang, a director at the State Copyright Bureau, said the order was not a result of foreign demand.

"This is not because of foreign pressure," he said. "This is about the country's economic development."

But he added it would be up to China's manufacturers to decide on what software to use.

There is a strong push from Dell and Hewlett-Packard to move into the Chinese market, and more than 95% of PCs in China have Windows installed.

Some computer manufacturers say they have already started to pre-install operating systems. China's top PC vendors have signed deals with Microsoft to buy US$700m worth of Windows programs, the Shanghai Daily reported.

The MII added software retailers should provide "favourable prices and qualified service to PC makers".