Barely a week after Google was widely criticised for agreeing to censor its Chinese website, Mr Gates said that he would not reject a country on the basis of restrictive rules on certain industries, such as pornography.

Speaking to an audience of business leaders, including Sir Richard Branson, the Virgin boss, Mr Gates said: “We’re not like lobbying to say, ‘Come on the US has different rules and has got this perfect’.”

Increased use of technology and information in China would also make the country more democratic, he said.

“I think [the internet] is contributing to Chinese political engagement . . . Access to the outside world is preventing more censorship.”

China has restricted access to politically sensitive websites, with Microsoft among those that have agreed to censor some sites.

Mr Gates said that technologies developed by Microsoft and others were a net contributor to political freedom.

“Once you had to have television or a newspaper to speak broadly; as the internet has come that power has changed and that is preventing significant censorship. The idea something can truly be kept secret – that can’t happen,” he said.

Last week Google was criticised for supporting undemocratic and restrictive policies after it launched a Chinese website that stripped out information not approved by the Communist authorities.

The company, whose motto is “Don’t be evil”, is launching a site that restricts people from reading about what are known as “the three t’s and the two c’s”. This is a reference to Taiwanese and Tibetan independence, the Tiananmen Square massacre, cult-related searches, which may trigger reference to the banned Falun Gong organisation, and information about Communist Party supremacy.

The company estimates that about 1,000 search categories are blocked by this filtering. No published list of barred terms exists, although the Chinese authorities are quick to complain if offending information becomes available.

As a result of the filtering, access to Google’s website is slowed down.

In a wide-ranging session Mr Gates also predicted that China would become the biggest broadband user in the world. Only India might catch it but that would take 50 years, he said. The Microsoft founder pledged not to let piracy put him off China, where an estimated 98 per cent of all software used is pirated.

“We are always upset that they aren’t paying us for our software but we’re not going to pick up and go home,” he said.

Beating software piracy in China and India and putting them on a par with the United States and Europe would take ten years, he said.

However, Mr Gates said that sales of Microsoft’s software in the two Asian countries was increasing and he was optimistic that they would eventually adopt licensing practices, similar to those in Taiwan and South Korea.

Despite his enthusiasm for China, Mr Gates said that Microsoft remained committed to carrying out its research and development (R&D) in the US.

“Microsoft does most of its R&D in the US. Ten years from now, we still be doing most of our R&D in the US,” he said.

Mr Gates, meanwhile, played down fears that the world was headed for a long-term energy crisis, despite high oil prices.

“This is not a two-year spike, or at least that is not the way the markets are looking at (it),” he said of oil prices. However, he insisted that although it created difficulties in the short term, particularly for developing countries, in the long run there should not be an energy problem or a need to increase carbon emissions, as alternative energy sources are developed.

“The amount of innovation that is required is dramatic” he said. “We cannot be in denial to solve this problem.”

To read Irene Khan, the Secretary-General of Amnesty International, comments on Google and China on Times Online's Davos Weblog, click here.

Times Recommends

• Food prices rise 8.3% on soaring fish and meat
• Car sales crash as economy hits skids
• House prices fall but Bank leaves rates on hold