Frank Yu, former Casual Games Producer for Microsoft in China, recently gave a report on the state of piracy in China following the Hong Kong raid where authorities seized 10,000 mod chips for Nintendo consoles. The last major news of piracy in China was last year; at that time it was for the Xbox 360.

Remember our report about Xbox 360 and Wii piracy in the Philippines? Turns out piracy is popular for both the Xbox 360 and the Wii in China as well.

According to Yu though, there isn't much demand for the PlayStation 3 so there's no modding or any distribution of pirated games in China that he is aware of and he doesn't even mention the PSP, which is a popular victim in many other areas. The Nintendo DS isn't spared however, as the Supercard (R4 card) is being sold in China.

Yu states that the Japanese Wii is a more popular candidate for modding since the US Wii has more protection. Modded Wiis can still download firmware although some of the more recent games, like Metroid Prime 3: Corruption won't work (although Yu believes this won't be true for long).

As for the Xbox 360, piracy is still very much active and rampant in the country. While Xbox 360 consoles in China will still be shut out of Xbox Live when MS detects that the console is modded, Yu has heard of a rumor that talks of a mod chip you can switch on and off. One just has to turn it off to log on to Xbox Live.

Hacking and modding is rampant but also incredible efficient - so much that the "folks at MS are always impressed by the speed and workaround that hackers and modders do to the motherboard." Hacking in China is also popular with foreigners, who aren't strangers with hacking shops at all.