Smith put the piracy rate of software in China at 82 percent -- eight out of 10 software products in use are unlicensed. Software includes everything from computer programs to movies, music and video games. He said it was a continuing problem because the Chinese government refused to criminalize software piracy.
"There is a lack of deterrent enforcement in China," he said. "China has not been great in bringing criminal action against pirates. The government has simply failed to devote energy and resources to dealing with the problem. Any kind of deterrent would get results."
Though the country enforces intellectual property laws through administrative ministries, these organizations only find the offender and then fine them very small fees. Smith said the threshold was quite high for an offender to be tried criminally.
Like ICE's Morton, Smith said the Internet was the No. 1 problem. "It's out of this world," he said of Internet piracy. "It pays to be a pirate."
He said that besides the dangers of U.S. consumers downloading viruses attached to illegal software, the U.S. economy suffered a loss of revenue and jobs.
"The copyright industry employs 5 percent of U.S. jobs -- it should be 10 percent," he said. "If piracy was more under control, it would create more jobs and revenue."
Reuters and The Associated Press contributed to this article.