After a two year investigation by the FBI, Chinese police have shut down two criminal organisations; seizing around a half a billion dollars worth of high quality counterfeit software and around $8 million worth of property.  11 people were arrested in Shanghai and 14 more were arrested in Shenzhen, all charged with copyright violations.   The two organisations were involved in pirating Microsoft and Symantec software, agressive advertising of its counterfeit products and selling them across the globe.  The Chinese gangs were discovered in 2005 and secretly worked with US suspects.

According to the Business Software Alliance, while China has been a leading source of pirated goods, its rate has actually been dropping in recent years.  However, it estimates that global piracy resulted in $40 billion in software revenue losses in 2006.

According to a senior attorney on Microsoft's worldwide anti-piracy organisation team, the Shenzhen group set the record for piracy of Microsoft software, involved in an estimated $2 billion worth of counterfeit software sales.  He also mentioned that Microsoft's Windows Genuine Advantage programme with the help of information gathered from customers and partners has made a substantial improvement in tackling piracy.  

Further information can be read in this source Forbes story.