Most Chinese film executives believe movie piracy, which already accounts for more than 90 per cent of the market in China, will expand in the short term and is unlikely to shrink in the future, according to a major industry survey.

The survey was conducted by the Centre for American Studies of the Chinese Academy of Social Sciences on behalf of the Motion Picture Association, thelobby group for Hollywood and the global interests of the US film industry.

The survey represents an effort by the MPA to put a Chinese face on its longstanding claims about the size and scope of movie piracy in China, which it argues is devastating the local industry as well as harming foreigners.

"Pirated movies have fundamentally undermined the production capabilities of China's movie industry, with the private sector hit most severely," says the report, released on Monday in Shanghai.

The MPA's work in countries like China has often been undermined by the perception that the Hollywood lobby simply represents wealthy foreign studios with little interest in building the local market.

A recent study commissioned by the MPA estimated that piracy cost movie makers $2.7bn in 2005 in China, with more half of that loss being carried by the Chinese industry itself.

The latest report makes no such claims for total monetary losses, as it is based largely on the responses of about 100 senior Chinese executives to a list of survey questions.

One measure of the scope of piracy are China's 774 registered DVD/CD production lines which have a total annual capacity of about 2.7bn pieces, overshadowing official sales of only 353m in 2003.

"Some pirated DVD manufacturers have established their own reputations and brands," the report says.

On top of locally manufactured discs, consumers can also buy imported pirated discs as well as download movies from the Internet.

The rapid growth in downloads by young movie watchers, mostly from freelance sites offering such films for free, is a major reason why piracy will continue to thrive.

The makers of pirated discs are mostly clustered in Guangdong, the southern Chinese province bordering Hong Kong, and are structured along the lines of organised crime organisations, the report says.

"These (crime) bosses generally establish illegal production plants in mainland China but stay abroad themselves to avoid being arrested," the report says.

Between 1996 and 2005, 86 per cent of illegal discs seized in raids were in Guangdong.

The main drivers of piracy remain the tight restrictions on movies in China -- only about 20 foreign films a year can be released officially, despite huge demand -- and the huge profits that come from selling illegal discs.

Discs cost less than Rmb1 (12.5 US cents) to manufacture and are sold for between Rmb5 and Rmb10 each on the streets and in thousands of retail outlets.