MercoPress. South Atlantic News Agency

Drastic privatization of Chinese companies

The Chinese private sector expanded 50% between 2001 and 2004 when the number of private companies reached 1.9 million according to a release this week from the Chinese Statistics Office.

This confirms the drastic expansion of the sector. The Chinese economy is currently, a mixed economy", said Fred Hu Zuliu, from the Goldman Sachs Investment bank office in Shanghai.

Hu Zuliu believes the private sector must represent at the moment anywhere between 32 and 40% of China's GDP, which contrasts dramatically with the 95% when the deceased Deng Xiaoping launched the reform and open economy process 25 years ago.

The report also shows that in the same period, government owned companies dropped 47,9% in the three years considered, totalling 192.000 companies less at the end of 2004 reports the South China Morning Post.

Of that number 169.000 were directly controlled by the Assets Management and Supervision Committee with the purpose of cutting them in half and keeping only those which belong to strategic areas for Beijing such as oil, energy and naval construction.

During that three year period the number of "collective property" companies, remnants of the transition from a centrally planned to a market economy, also contracted drastically from 858.000 in 2001 to 456.000 in 2004.

As to the number of foreign companies operating in China the number rocketed from 13.000 to 152.000.

Following Beijing's strategy to improve the economy and adapt them to open market rules, the government privatized 60.000 companies from the manufacturing sector between 1996 and 2005, indicates the report.