All around 1.08 million privately-owned firms were registered in China in the 12 months to June, up 4.54 percent over the previous year, says a senior industry and commerce official.

"The increase represented the fastest growth of the private sector in years," said Wang Zongfo, director of the State Administration for Industry and Commerce (SAIC) at a meeting in Shenzhen, south China.

He attributed the boom in the non-state sector to the SAIC's facilitation of the registration of privately-owned firms, which encouraged individual's to set up businesses.

China had 25 million private businesses and 3.4 million state-owned enterprises by the end of June.

Meanwhile, the SAIC had closed 11,000 private firms with high energy consumption and serious pollution problems since 2004, and had deregistered 23,000 firms according to laws and regulations, he said.

During the period, the administration issued warnings to 1.98 million firms with poor credit records. The warnings aimed to improve awareness of credit building, said Wang.