One in every 16 Chinese mainland workers last year was either self-employed or working for a domestically-owned private company, marking a major expansion in China's private sector.

The State Administration for Industry and Commerce (SAIC) has reported 120 million people, up 9.5 percent from 2005, worked in the private sector, excluding companies with Hong Kong, Taiwan, Macao and foreign investment.

About 9.3 percent of the national tax revenue, 349.5 billion yuan, came from privately-owned firms last year, up 28.7 percent from a year earlier and higher than the national average tax revenue rise of 21.9 percent.

The self-employed paid 119.5 billion yuan (US$15.5 billion) in tax, accounting for 3.2 percent of the country's total.

The SAIC said private and individual businesses had maintained their expansion with aggregate output for companies up 16.1 percent and for the self-employed up 9.4 percent.

"Such steady growth has alleviated the country's employment pressure," said an SAIC statement.

About 132 million new business entities run by the self-employed were registered in 2006, up 5.4 percent from a year earlier, bringing the country's total individual business to nearly 26 million.

Their total assets grew by 11.4 percent, or 65.93 billion yuan, to 646.9 billion yuan, with the average assets climbing by 1,343 yuan, or 5.7 percent, to 25,000 yuan.

More than 80 percent of individual business entities were engaged in the service sector, mainly wholesale and retailing.