May 6 (Bloomberg) -- Microsoft Corp., the world's biggest software maker, plans to spend $280 million building a research and development campus in Beijing, bolstering efforts to create more products for the world's most populous nation.

The center will be the company's largest outside the U.S., with space for 5,000 employees when it's finished in 2010, Zhang Yaqin, chairman of Microsoft's research and development operations in China, told a news briefing in Beijing today.

Microsoft is stepping up research operations in China as it looks to boost sales in a market where more than four-fifths of personal computer software is pirated. The Redmond, Washington-based company said in November it planned to add 1,000 engineers in the country by June, with about 90 percent of those workers developing products for the world's fastest- growing major economy.

``Piracy in China is putting pressure on companies to develop software products that aren't as vulnerable to illegal copying,'' said Liu Ning, an analyst at Beijing-based research company BDA China Ltd. ``Piracy is getting better in China but will stay a problem in the short term.''

About 82 percent of software run on PCs in China was pirated in 2006, costing companies including Microsoft $5.43 billion in lost revenue, according to data from the Business Software Alliance published in May 2007. Still, the piracy rate dropped from 92 percent in 2003, a decline that saved software companies $864 million, according to the group, which tracks software infringement.

Web-based Software

Microsoft last month began testing a Web-based application known as Live Mesh that gives users access to software and files via the Internet. Software offered online is difficult to copy and less vulnerable to piracy, BDA's Liu said.

China passed the U.S. to become the world's biggest Internet market by users in February, the state-run Xinhua News Agency reported last month, citing the government statistics. The Asian nation was home to 221 million Web users at the end of February, it said, without giving a number for U.S. users.

Microsoft's Beijing campus ``represents the role China is playing to help shape Microsoft's growing portfolio of products and services as the company expands its business across the world,'' Zhang said at today's briefing.

The software maker has research centers in Beijing, Shanghai and Shenzhen. It had about 3,000 engineers in China as of November, half of which were full-time employees, spokeswoman Hanna He said. Microsoft may double the number of full-time engineers to 3,000 by 2010, she said today. The software maker employs about 5,000 people in China, Zhang said in November.

To contact the reporter on this story: John Liu in Shanghai at jliu42@bloomberg.net

Last Updated: May 6, 2008 01:18 EDT