"The Chinese government has all along attached importance to the protection of intellectual property rights," said foreign ministry spokesman Qin Gang.

"I think we've always worked hard to protect intellectual property rights (IPR). This position has been consistent."

The US Trade Representative's office, unveiling an annual report on protection of IPR Friday, said China was being put on a "Priority Watch List" of 14 countries and warned that WTO action could follow.

The "Special 301" report "concludes that infringement levels remain unacceptably high throughout China, in spite of Beijing's efforts to reduce them," the USTR said in a statement.

Officials said the reference to legal action at the World Trade Organisation was a sign of US exasperation over the issue, following the conclusion of a special USTR review of Chinese IPR protection.

"The language is pretty strong compared to what's been said in the past. This is the first time that the WTO link is being made," one official said on condition of anonymity.