(ChinaKnowledge, Sept 25, 2006) Non-State-owned enterprises will constitute nearly three-quarters of China¡¯s economy by the end of this decade, said China¡¯s top think tank.

The annual report of the Chinese Academy of Social Sciences was quoted by China Daily Online as saying that the non-State sector is projected to contribute three fourths of China's GDP in five years, when at least 70% of China's firms will be privately owned.

The latest projected figure is up from last year¡¯s, when 65% of GDP was generated by private or semi-private enterprises in 2005.

From 2000 till last year, State-owned enterprises cut 15 million jobs, while private companies created about 57 million more jobs.

Private companies also pay a great amount of tax, which has been rising 40% annually since 2000. On the other hand, State companies registered less than 7% tax.

According to China Daily, tax revenue generated by the private sector accounted for over 80% of local government revenue in many local regions in China.

However, the report was vague about the exact definition of private ownership. And whether the numerous non-State-owned companies with varying degrees of government influence are included as the report¡¯s non-State-owned companies was unspecified.

Despite the uncertainty, the report appeared to confirm a trend that State governance in enterprises in the nominally socialist country is rapidly shrinking.

As a barometer of social change in China, the frequently amended constitution was changed in 1999, upgrading the private sector to become a vital part of the Chinese economy.

And in 2004, another constitutional amendment consolidated the status of the private sector, stating that ¡°legally obtained private property of the citizens shall not be violated."
source:ChinaKnowledge
tag:China