Record labels are urging Beijing to relax stringent import controls on music audio and video products to counter the flood of pirated copies. A majority of consumers in leading mainland cities had brought albums of Hong Kong singers - both legal and illegal - in the past 12 months, the International Federation of the Phonographic Industry (IFPI) said. There was 95 per cent penetration in Guangzhou, 91 per cent in Shanghai and 82 per cent in Beijing, an IFPI survey found. This compared with 92 per cent penetration in Hong Kong and 53 per cent in Taiwan. The IFPI represents most leading music companies, including BMG, EMI, Warner Music, Sony Music and Universal Music. The survey, which was to explore market potential in China, showed that people in the southern cities preferred Cantonese songs, while consumers in the northern cities liked Mandarin songs by Hong Kong performers. The industry estimated that up to 95 per cent of music CDs sold in the mainland were pirate copies, IFPI (Hong Kong) chief executive Ricky Fung Tim-chee said. 'There is no doubting the market potential for Chinese repertoire, especially for Hong Kong pop singers,' he said. However, he said foreign record labels found it difficult to gain entry to the China market. 'There is no official quota on importing music audio and video products but the Government has set stringent rules in licensing mainland agents to distribute CDs for foreign labels,' he said. Mr Fung estimated about 150 legal record titles were sold in China every year by music companies based in Hong Kong. However, much of the music produced by Hong Kong companies was blocked out, he said. The Hong Kong music industry produces about 300 new releases every year and there are about 3,000 titles in circulation. Despite Beijing treating foreign music CDs as restricted imported products, Mr Fung said there had been one ice-breaking example for the Hong Kong industry in the 1980s. 'Teresa Tang's charisma swept all over China in the early 1980s,' he said of the late Hong Kong-based, Taiwanese singer. Her record label made handsome profits despite piracy, but this was an exceptional case. Music companies had been working the China market without much success over the past two decades, Mr Fung said. The industry hoped to broaden its business scope, he said, especially with the Hong Kong market suffering from the economic downturn and the Southeast Asian market hit by piracy. Mr Fung suggested the SAR Government should consider the flow of music products in its proposal to create a free-trade agreement between Hong Kong and the mainland. Meanwhile, Hong Kong music sales plunged to HK$856 million last year, triggered by a big fall in sales of international CDs, the IFPI said. The industry body revealed that total turnover generated from music audio and video products in Hong Kong dropped 8 per cent from HK$932 million in 2000. Mr Fung said audio CDs, which contributed the major proportion, had shown a contraction of 10.26 per cent, without disclosing the exact amount in dollar terms. 'Sales of international albums plummeted 18.9 per cent last year,' he said, adding that this category accounted for 30.1 per cent of total turnover. Cantonese CDs sales accounted for 49.35 per cent of total turnover and Mandarin albums for 8.8 per cent, while classics and Japanese music accounted for 7.25 per and 4.4 per cent respectively. The sinking record sales have reflected the frailty of the industry in Hong Kong, hit hard by last year's economic downturn.