Beijing, China, 14 Nov – Guangdong province, in southern China, heads the list of Chinese provinces with the highest number of privately-owned companies, with 2.94 million, official Chinese newspaper People’s Daily reported Monday.

Despite China being a nominally communist country and the state sector having a significant weighting in terms of the country’s largest companies, in Guangdong province private companies, according to the paper, have been increasing at a rate of 30,000 per month.

Huang Huahua, the governor of the province, which neigbors Macau, said that the growth of the private sector was due to investment by the provincial government in the small and medium-sized companies sector.

Since 2003 the province has invested some 2 billion yuan on subsidies and the creation of institutions to support the private sector, Huang said, quoted by the paper, which is an official organ of China’s communist party.

According to figures from the provincial government, private companies account for around 40 percent of Guangdong’s production.

In a recently published study, the Chinese Academy of Social Sciences, China’s most important research center, said that currently over half of China’s gross domestic product (GDP) was generated by private companies, a figure which is expected to increase to 75 percent at the end of the decade.

The study also showed that between 2000 and 2005, Chinese state companies laid off 15 million workers, while private companies created 57 million new jobs.

Despite representing around 40 percent of China’s total companies, Beijing expects the private sector to become increasingly robust and create sufficient jobs to make up for lay offs due to restructuring of the public sector. (macauhub)