Baidu, which has been on the notorious markets list for years, in July inked an agreement with top music studios to distribute licensed songs through its mp3 search service, ending a legal dispute over accusations the company encouraged piracy.

However, Alibaba Group's Taobao unit made it on the United States Trade Representative's November notorious markets list for offering a wide range of copyright infringing products.

"Several commentators reported that pirated and counterfeit goods continue to be widely available on China-based Taobao. While stakeholders report that Taobao continues to make significant efforts to address the problem, they recognize that much remains to be done," USTR said in its report on Tuesday.

The report also cited two Chinese music websites, Sogou Mp3 and Gougou as providing "deep linking" services to copyrighted music. Four of the 15 listed physical notorious markets for piracy are located in China, USTR said.

(Reporting by Melanie Lee; Editing by Jacqueline Wong)

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