Private firms will remain the largest contributor to China's economic growth, accounting for three-quarters of the gross domestic product by 2010, a new study shows.

The proportion of private firms to the national economy was 65 percent last year, a rise of 10 percentage points from 2000, said the China Private Economy Development Report released by the All-China Federation of Industry and Commerce (ACFIC).

More than 70 percent of companies would be privately owned by 2010, and their growth rate would continue to outpace the national average, said Chen Yongjie, director of the ACFIC research institute.

He said private firms had expanded rapidly in size and economic output. A batch of conglomerates and business groups competitive in both local and global markets would soon appear.

Private firms were rare under the centrally-planned economy and were subordinate to state-owned enterprises until 1978 when a reform began to revitalize China's economy.

The report said the annual investment by private firms had almost quadrupled from 1.38 trillion yuan in 2000 to 5.32 trillion yuan last year, registering an average annual growth of 29 percent.

About half of the country's investment comes from private firms, figures from the National Development and Reform Commission show.

Of the country's 40 industrial sectors, 27 were dominated by private firms, said the report.

Over the past five years, 349 million people have been employed by private firms in the industrial and service industries, a hike of 70 million from 2000.

Job opportunities generated by private firms in cities and towns rose from 150 million in 2000 to 207 million last year while those created by state-owned companies witnessed a decline of 15 million.

The combined industrial output value of private firms with annual sales of at least 5 million yuan was 2.14 trillion yuan, almost four times the 2000 level.

In February last year, the State Council, China's cabinet, implemented a package of 36 measures, including easing market access requirements and enhancing financial support to promote the development of the private economy.

Source: Xinhua