Beijing hosts China's first-ever Grammy Festival on April 30.[Photo provided to China Daily]

"China's music market continues to be one of growth, challenges and innovation," the report said. "It also remains, fundamentally, a market of potential, gradually but determinedly being realized by record companies working together with local and global partners."

The Chinese music industry "is transitioning to transactional data to calculate the size of the Chinese market but not all companies have this data available", the report said.

Income from the country's music market last year was $292.3 million, the digital component being 90 percent, the report said. Revenue grew 35.3 percent, driven by a 26.5 percent rise in revenue for streaming music.

"After years of decline, which was mainly caused by piracy, finally we have some good news for everyone involved in the industry, especially the singer-songwriters and record companies," says Guo Biao, the federation's chief representative in China. The federation's Beijing office was set up in 1994.

"Global record companies are keen on investing in China, which is seen as a market for international artists as well as a place to discover new talent," Guo says.

"Chinese consumers' tastes have changed, and there is now more appetite for a wider range of genres than ever before."

What makes China a market of opportunity at both home and abroad is that the country has undergone a cultural shift in regard to the value and protection of copyright - a process driven by government regulation alongside the efforts of record companies and other rights holders.