Microsoft, hoping to curb piracy of its software in China, has brought down its prices by 70 per cent, the first time it has made such a lucrative offer since its entry into the country in 1992.

Microsoft said it has slashed the price of Office 2007 home student edition to $29 from $102. The promotion for the special offer started yesterday, and will last till next week’s National Week holiday.

Jim Lin, the company’s public relations manager in Beijing, said the new pricing is designed to make its products more affordable, so that people prefer licenced products instead of pirated versions. In the near future company plans more promotions like this.

The step is likely to improve China’s relations with the US. US music, movie, software, book industry groups estimate their losses in China as a whopping $3.5 billion, three times more than 2001, because of piracy. Microsoft is the worst hit, since its pirated products in China sell for as little as $1.50.

The police are also taking piracy very seriously, last month detaining the operator of "Tomato Garden", a website that hosted the source for millions of pirated versions of Microsoft software. X