Lured by 1.3 billion potential consumers and an economy growing at a pace double that of the world's average, Microsoft Corp, like most multinational corporations, is eager to tap the China market. But in China, the pay-off is not nearly as clear as the appeal. Faced with rampant piracy of its widely used software, Bill Gates' Microsoft is not making any money in China, according to a report in the February 17 issue of Forbes magazine, due for release in the United States tomorrow. Microsoft has admitted running losses in China for the past 10 years and is likely to continue to lose money for at least five more, according to the magazine. The software giant said it could wait another decade or two before turning a profit in China. Accustomed to a gross profit margin of 85 per cent on its most popular items, Microsoft's experience in China has been tough to swallow but it is determined to forge ahead. 'This is a long-term opportunity of substantial magnitude and strategic importance,' Craig Mundie, a Microsoft senior vice-president and chief China strategist told Forbes. 'Are we happy if we only make this money over 10 or 20 years? Ultimately, yes.' But Microsoft faces a tough battle. According to the International Intellectual Property Alliance, 92 per cent of business software applications sold in China in 2001 were pirated, costing an estimated US$1.14 billion in lost revenue to US manufacturers alone, up from US$765.1 million in 2001. Computer software makers are not alone. The alliance estimates that US$160 million in pirated DVDs and videos and US$47.3 million in pirated CDs and cassettes were sold in China in 2001. Microsoft would have earned nearly US$400 million if it had been paid for its share of software installed in new computers in China last year, but its revenue was only US$85 million, according to International Data Corp, an industry research organisation cited by the magazine. For Microsoft, China's staggering economic growth beckons. There were only 36 million personal computers in China but its PC market was expected to top Japan to become the world's second-largest this year, the magazine said.