"The music industry is one of the few sectors that has not caught up with international standards after China joined the [World Trade Organisation]," Andrew Wu, managing director of Epic Music, said at ceremonies marking the new plant. "The industry is still suffering from piracy."

Indeed, on the streets of Shanghai, pirate versions of popular discs sell for about 10 yuan (HK$9.38), up to 15 times cheaper than a genuine version.

Mr Wu was short on details of how the venture might circumvent piracy. He said it was capable of turning out 12 million CDs a month.

Sony Music International chairman Robert Bolin said: "The cost should be lower since we can avoid shipping costs and duties.

Mr Bolin, too, dodged questions about how the company hopes to compete for sales in a country where economics of scale cannot reduce prices to as low as bootleg copies of varying quality.