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.
