China's copyright authorities are preparing an Internet system to fight on-line piracy, an official said in Beijing Thursday.

The system would be able to identify pirated software, films, music and other copyrighted works, said Yan Xiaohong, deputy chief of the National Copyright Administration.

"Piracy is still a serious problem in China," he said.

China is the world's second-largest Internet market after the United States with more than 123 million Internet users and 788,400 websites.

The government has issued the Protection of the Right of Communication through the Network, effective from July 1, which bans the uploading and downloading of Internet material without the copyright holder's permission.

Yan said the government was also working on the ratification of two international treaties on the Internet with the World Intellectual Property Organization (WIPO).

However, China still lagged in copyright protection at an international level, although piracy was still a problem in countries with the highest levels of copyright protection.

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