China overtook the US last year to become the nation with the world's largest number of internet users. But its acute piracy problem with music downloading means musicians are not able to gain any commercial benefit from their popularity online. Now the situation has changed.

According to the International Federation of the Phonographic Industry, or IFPI, China accounted for less than 1 percent of the world's legal music download market last year at just 76 million US dollars.

Illegal music downloading is doing serious damage to the market.

But the situation has changed. Google has launched an interesting new service in China, a fully licensed, free-to-use, ad-funded download platform, offering some 350 thousand tracks. Google promises the number will rise to over 1 million in the coming months.

140 record labels have joined the alliance, including all four majors, Sony, Universal, EMI, and Warner Music. IFPI says the new business model is a good first step in the long road to monetizing digital music in China.

In fact, the big four music companies have sued Chinese local search engines in a bid to stop them linking to illegal download sites. But local firms have defended themselves, saying they are simply offering search links. The cases are pending.

(CCTV April 8, 2009)