Microsoft chairman Bill Gates has raised Chinese eyebrows with a reported angry outburst against the country.

Legal action between Microsoft and Google continues to yield insights into the temper and passions at the traditionally placid Seattle firm. The news comes from a former employee who testified in a Washington court that Gates said the Chinese people and its government had "f-----" his company.

According to wire service reports, former Microsoft executive Kai-Fu Lee testified that Gates had lost his temper over a lack of success in penetrating the Chinese market.

Microsoft is suing Lee, a search technology linguistics and translation expert, along with his new employer, rival technology corporation Google, over the alleged breach of a contract under which Lee agreed not to perform work for competing firms for the space of a year.

While overseas reports stated Microsoft is denying Gates made the comments, the local company was not able to confirm this, with a public relations representative saying only that they were unaware of the story and did not have access to wire services. Later they added: "Microsoft refuses to comment."

In June this year, Microsoft CEO Steve Ballmer surprised many observers when he said software piracy rates in China were as high as 90 per cent, adding that this was something Microsoft had been forced to accept to gain entry into the Chinese market.

At the time Ballmer quipped that he would prefer to see Microsoft's software pirated than that of competing products.