The 42-year-old businessman now holds one third of the shares of Huadong Electrical Appliance Group worth nearly 800 million yuan (US$96 million).

The group he founded holds shares in 19 enterprises in Shanghai and Beijing and a number are state-owned. His six fellow shareholders are all from the private sector.

The new economy with different types of ownership has taken root in China. At the just concluded forum on the diverse economy held in Shanghai, respected Chinese economist Xiao Zhuoji predicted that the "mixed economy" would probably soon become the driving force of China's fast growing economy.

Zheng Rongde has witnessed and experienced the ups and downs of the private economy in China during the last two decades. He had been dreaming of having the same advantages as the rival state-owned enterprises.

His concerns were addressed at the 16th National Congress of Communist Party of China (CPC) in last November which backed the development of a mixed economy and a reduction in state-owned investments.

The work report delivered at the congress said that joint stock systems should be actively promoted except for a few sectors that must be operated by state-owned capital.

"It's the prime time for private enterprises," Zheng said, adding that his group would consider absorbing state-owned and foreign investment.

Xiao, also a professor at the prestigious Peking University, said the booming non-public sector, including foreign-invested firms, provided a strong base for the burgeoning mixed economy.

The total assets of the domestic private economy had exceeded the net assets of the state-owned sector, he said.

By June 2002, there were 2.2152 million private enterprises with registered capital of 2.1 trillion yuan (US$253 billion). The two figures in 1978 were both zero.

Fan Gang, another leading Chinese economist, maintained the development of a mixed economy meant that the reform of state-owned enterprises had radically changed ownership patterns.

Fan said that after 13 years of reform, a lot of state-owned enterprises still failed to profit.

The vitality of the mixed economy was widely recognized as the method to revitalize state-owned sectors, he said.

In China's economic powerhouse, Shanghai, the fixed asset investment of the state-owned economy from 1993 to 2001 rose by an annual average of 7.73 percent, while the figure for the mixed economy was 43.21 percent.

As every region across China plans to promote the mixed economy after the historic CPC congress, Shanghai wants to take the lead as it has done previously. Sources with the municipal government said thousands of millions of state-owned assets would be cut from some sectors and transferred into state-held capital.

(Xinhua News Agency January 13, 2003)