China's software firms should focus on making breakthroughs in key products such as operating systems, database management systems, and intermediate software, a senior official with the Ministry of Information Industry (MII) said Thursday.

Lou Qinjian, vice minister of MII, said the nation's software industry lags far behind its overseas peers in research and development and its combined sales accounts for only six percent of the world total.

Sales of China's software industry totaled 480 billion yuan (US$62.9 billion) in 2006, and exports accounted for US$6 billion, said Lou at the opening ceremony of a software exhibition.

He noted software industry sales have grown at more than 40 percent annually in recent years.

China has about 13,000 software developers, of which 35 have an annual sales of more than one billion yuan (US$131.1 million), according to official statistics.

Sales of the nation's software industry are expected to reach almost 1.1 trillion yuan (US$144.2 billion) in 2010, according to the Eleventh Five-Year Plan for Software Industry Development (2006-10) released by the ministry in May.

China will by 2010 have 10 to 15 major software firms that each have annual sales of 10 billion yuan, according to the plan.

Wang Bingke, deputy director of the ministry's Department of Economic Restructuring and Operations, said earlier the MII would encourage software firms to cooperate and form innovative unions to build an "innovative, China-made technological system".

(Xinhua News Agency June 15, 2007)