Microsoft CEO Steve Ballmer met with U.S. President Barack Obama on Wednesday to discuss Microsoft’s concerns at Chinese intellectual property (IP) piracy problems.

Ballmer met with a number of U.S. and Chinese business leaders at the White House on Wednesday. Chinese President Hu Jintao and U.S. President Barack Obama were also present. Ballmer was invited by the White House to discuss the serious IP piracy problems that currently exist in China. According to a transcript, released by the White House, Obama underscored the important and need for greater IP enforcement in China. The President said:

“Some of it has to do with intellectual property protection. So we were just in a meeting with business leaders, and Steve Ballmer of Microsoft pointed out that their estimate is that only one customer in every 10 of their products is actually paying for it in China.  And so can we get better enforcement, since that is an area where America excels — intellectual property and high-value added products and services.”

Obama also hinted that Chinese President Hu Jintao had agreed to take action. “I appreciate his willingness to take new steps to combat the theft of intellectual property,” the U.S. president said. China is well known for its high software piracy rates. Chinese President Hu Jintao previously met with Microsoft Chairman Bill Gates during his first official visit to the United States in 2006. At the time, Jintao issued a decree requiring all personal computers manufactured in China to come with a licensed operating system. The move improved levels of Microsoft piracy rates but Ballmer’s meeting this week highlights that there’s still more action required in China.

Ballmer was also on the guest list for President Obama’s state dinner on Wednesday evening. According to the Seattle Times, the Microsoft chief executive was on a guest list distributed by the White House which also included Gov. Chris Gregoire, U.S. Secretary of Commerce Gary Locke, actor Jackie Chan, musician Herbie Hancock and many others.