The private sector last year accounted for about 40 per cent of the economy of Shenyang, capital of Liaoning province, one of the bastions of the state economy in the mainland, it has been reported officially. The figure marks another milestone in the rapid growth of private firms despite their limited access to bank finance, political prejudice, and illegal taxes and fees imposed on them by voracious officials. The Liaoning Daily said that Shenyang's private companies had an output value of 36.99 billion yuan (about HK$34.43 billion) last year, up 21 per cent over 1997 and accounting for 39.6 per cent of the city's gross domestic product, and had by the end of September paid 1.9 billion yuan in taxes, 38.3 per cent of the total in the city. During the year, they took on 150,000 workers laid off from state firms. As of the end of December, the city had 234,000 private companies, employing 669,000 people and with a registered capital of 17.9 billion yuan. Of the companies, 20 had output and sales exceeding 100 million yuan. The private sector has grown from restaurants, clothing and repairing to industrial processing, petrochemicals, electronics and information technology, the Economic Daily reported. Last year private firms took over 93 small and medium-size state companies with total assets of 7.79 billion yuan and invested 1.1 billion yuan of new money into them. Their rapid growth in Shenyang is significant because Liaoning received more state investment than any other province during the first 10 years of Communist rule, so that its economy was dominated by giant state firms. It is these companies that have been hardest hit by the transformation from a sellers to a buyers market. In recognition of the growing importance of the private sector, the National People's Congress is expected to amend the constitution next month to give the same protection to private assets as that given to state assets. Official figures published yesterday show that, as of September last year, the mainland had 30.83 million private companies nationwide employing 72.35 million people, including 3.01 million laid off from state companies, and accounting for 37 per cent of all traded goods, up from 18.9 per cent in 1990. Earlier this week, the Ministry of Foreign Trade and Economic Co-operation approved the second batch of private companies to do export and import business, adding 41 to the first group of 20 announced in January. The 41, from 15 provinces, cities and regions, have an average registered capital of 36 million yuan and sales in 1997 of 120 million yuan. 'The change in the constitution is of great symbolic importance,' said one economist. 'But addressing the practical difficulties private companies face will take time. 'In theory, they should have access to the stock market but the quotas are still decided by government officials who favour state firms. 'Banks are more willing to lend to private firms but city and provincial officials still order banks to lend to state companies.'