By Lin Jingxue

　　Liu Shulan and her husband Ren Yunliang started their career in 1983 with only 60,000 yuan (US,432 at that time), the total compensation they got for their severe suffering in the Cultural Revolution(1966-76), China's ten-year-long chaos. For many Chinese people, they would rather put the moneysintosbanks and live on the interests or buy some luxurious goods.

　　But Liu and her husband decided to make an investment with the money when the country's economic reform and opening up policy were taking off under the leadership of Deng Xiaoping in early 1980s.

　　They started transportation with three trucks in Dandong, a city on the Liaodong Peninsula in Northeast China and along the beautiful Yalu River in 1983.

　　Three years later, Liu got huge income from the prosperous transportation. She decisively invested in the Dandong Friendship Emporium, which was on the verge of bankruptcy.

　　The investment later became a milestone for the development of Liu's Huafeng Group.

　　Then Liu turned her eyes to Dalian Economic and Technical Development Zoneswheresshe opened Dalian Huafeng Trading Corporation. Her investment went further southward in 1989 to Shenzhenswheresshe ran the Riyuehua Restaurant.

　　Liu realized the importance of cooperating with foreign investors in Shenzhen. She had a comprehensive analysis of the strength and weakness of the cooperation between domestic companies and foreign investors.

　　Liu came to know a Thai businessman who had just failed an investment in steel cylinder in Shenzhen in 1992. Liu introduced the businessman to the State-owned Dalian No. 523 Factory. The Thai businessman decided to invest in the factory with Liu. They set up Dalian Liantai Pressure Vessel Ltd.

　　The company had a capacity of producing 200,000 steel cylinders of five series per year. All the products adopted the international quality standard ISO-9000. Dailian Liantai had not only invigorated the sluggish old State-owned factory but also strengthened Huafeng Group.

　　In the same year, Liu set up Dalian No 523 Port Service Corporation with the Dalian No. 523 Factory. Huafeng invested 10 million yuan(US.2 million)sintosthe corporation including purchasing equipment of a 3,000-ton dock and a 5,000-ton dock. The dock, which occupied 100,000 square meters with 5.5 kilometers long railway and the capacity of dismantling dock and dock storage, came to life again with the investment.

　　Liu established Dandong New Friendshipsgroupsand Dalian Huafengsgroupsrespectively in 1993. The two groups lifted Liu's career to a new stage.

　　After that, Liu began her overseas investment in developed countries. She set up her transnational corporation in the United States, which offers global commercial information to her firms in China.

　　Like Liu Shulan and her husband, thousands of Chinese people then, such as unemployed educated youth (millions of secondary school graduates who were unable to pursue their studies in institutions of higher learning during the Cultural Revolution), laid-off workers, military person transferred to civilian work, went in for business for a living at that time.

　　After several years'or even a dozen years'hard working, these people have become real bosses with their own companies in business.

　　Some people both overseas and at home began to call them "middle class" who can afford buy their own apartment, go on seaside vacations, spend lavishly on their one permitted child, and even own a luxury car.

　　In the past 20 years, China has been transforming its out-of-date planned economysintosmarket economy. And the number of such businessmen also has been increasing step by step, just like snowball rolling on the snowfield in winter.

　　There are at least millions of such business people, including small size firms or self-employed laborers, although quite a number of experts argue over exactly how many.

　　Now, private enterprises, with elastic operation and prompt market response, have gradually gained a firm foothold in the national economy.

　　Experts say the key to the private enterprise boom lies in acute market accession and effective market strategy.

　　In Northeast China's Liaoning Province, the Shenyang-based Civic Moon Group, for example, has transformed its 20 supermarketssintos24-hour stores, catering to the growing consumer demand. The firm's sales have increased over 30 per cent.

　　"The service and scale of supermarkets at present can hardly meet the consumers'requirements,"said Shao Fang, general manager of the group's store sector. "We try our best to satisfy the consumers'real needs."

　　Compared with developed countries, Chinese cities still lack commercial facilities. Statistics show that there are 1,200 supermarkets in New York with their sales amounting to more than 40 per cent of the city's retail industry.

　　"We aim to catch up with the international-level service by promoting 24-hour convenience shops,"Shao said.

　　Compared with the State-own enterprises, diversified business operation is another efficient aspect of private firms.

　　The Civic Moonsgroupshas developed the Civicmoon Resort which includes more than 80 garden villas with a floor space of 275,000 square metres.

　　"They ought to be the ideal home for the big shots,"said Shao Jing, president of the group.

　　Located between the Forest Park and the Shenyang-Benxi expressway in the capital city of Liaoning, the dwellings have attracted local VIPs and foreign investors.

　　Senior executives of world-known companies such as Lucent and Siemens and officials of foreign embassies in Shenyang, capital of Liaoning Province, have showed great interest in the villas.

　　"Such villas provide a comfortable environment for investors,"Shao said.

　　China's economy has undergone a fundamental change over the past decade, from complete reliance on state-owned and collective enterprises to a mixed economyswheresprivate enterprises play a strong role.

　　By 1998, the domestic private sector had grown to about 27 per cent of GDP, making it second only to the state sector in economic importance. (The other sectors are the foreign, collective, and agriculture sectors.)

　　Despite its growing importance, at the end of 1999, the private sector accounted for only 1 per cent of bank lending, and only 1 per cent of the companies listed on the Shanghai and Shenzhen stock exchanges were non-state firms.

　　At present, private sector and the State-own firms supplement and enrich each other in improving business management, technology innovation and service after sale.

　　"Facing the challenge of entering WTO, we will urge and help State-owned and private enterprises to upgrade their products for an international market,"former mayor of Taizhou Yang Renzheng said.

　　It will push its high-tech industries and improve the local investment system to achieve faster economic growth. In addition, it will focus on its social and cultural development.

　　With 571 islets, three aquatic farms, four bays and 745 kilometres of coastlines, Taizhou is a unique integrated coastal city in East China's Zhejiang Province.

　　Encouraged by the local government, residents have raised funds to support the upgrading of infrastructures.

　　Industry has developed around export businesses, energy development bases, ports and summer resorts.

　　As the birthplace of China's shareholding system in 1992, 86 per cent of the city's State-owned companies have been rejuvenated by diverse forms of ownership.

　　For example, Zhejiang XingxingsgroupsCompany is a privately owned enterprise, whose output and sales have ranked second in all enterprises engaged in the refrigeration industry in China during the past four years.

　　Each year, the company invests .8 million (US,600) in research and development and is in co-operation with universities and scientific institutes in product development.

　　"The development of private businesses has created a good environment for our State-owned enterprises,"Yang said.

　　The rapid economic growth has also provided a strong financial foundation for its communications, power and water supplies, education and residential building, Yang added.

　　The private sector was suppressed in China during the period of central planning (1957-78) but it reemerged when reforms began in the late 1970s, and has grown rapidly over the past two decades. By the end of 1997, there were 960,000 registered private firms in China, employing 13.5 million workers.

　　According to statistics from State Industry and Commerce Administration, by 2001 China had 24.33 million registered self-employed businessmen with a total registered capital of 343.5 billion yuan (US.54 billion).

　　These recruited about 47.6 million workers who produced an output value of 732.0 billion yuan (US.5 billion).

　　It also had 2.02 million registered private enterprises with a total registered capital of 1.82 trillion yuan (US billion), which hired about 22.5 million laborers who made an output value of 1.23 trillion yuan (US billion).

　　The share of the non-state sector (self-employed businessmen and private enterprises) in the total GDP increased from 0.9 per cent in 1978 to 20.46 per cent in 2001.

　　This figure is expected to grow even more quickly in the future given the current improved policy environment within which private enterprises operate and develop.

　　"The economic reform and opening-up politics adopted by China since 1978 have led to profound and extensive changes in its politics, economy, society, and culture,"said Geoffrey Murray in his book "China, The Next Superpower: Dilemmas in Change and Continuity"

　　"The rapid rise of China's economy, its large population, strategic position and huge potential market, and its enhanced international status have made China's future development a key factor in post-Cold War world peace and order, the Oriental-Occidental cultural relationship, the North-South economicsgroupsand the Sino-US and the Sino-Japanese relationship,"Murray said.

　　As the non-state-own businesses expand, more and more private businessmen began to realize the importance of attracting more overseas capital and advanced technology.

　　Overseas Chinese entrepreneurs have invested some 37 billion yuan (US.5 billion) in the Chinese mainland, accounting for roughly 60 per cent of the total overseas investment, according to sources from the All-China Federation of Industry and Commerce, the general chamber of commerce in China.

　　"It shows their concern over the economic development of the birth-place of Chinese civilization,"said Jing Shuping, chairman of the federation.

　　Overseas Chinese entrepreneurs have made prominent contributions to the social and economic development of the world in the past, Jing said.

　　They will play an even more important role in economic globalization which is an unavoidable trend, he added.

　　Chinese entrepreneurs, who own one-third of the firms in Silicon Valley in the United States, have shown their potential to promote the new economy, Jing said.

　　China should have closer ties with overseas Chinese entrepreneurs especially now the world economy is becoming more globalized and dependent on information technology, Jing said.

　　On the other hand, privately owned enterprises still have some troubles in their way to get more speed development. Jing noted that private should be treated equally and given more development opportunities.

　　褹lthough the Constitution says clearly that non-State-owned enterprises are important components for the country's economy, these firms still face unequal treatment and barriers in many areas,"he said.

　　Jing's federation is a social organization linking government and private enterprises.

　　Influenced by decades of planned economy, State-owned-enterprises enjoy priority treatment in the country. While private enterprises for a long time played supplementary role in the economy.

　　In recent years, private enterprises have reported rapid growth with elastic operation systems and quick reaction to the market.

　　They have become shining stars, especially in the Internet-based economy, said Jing.

　　According to Bao Yujun, vice-chairman of the federation, these private companies are gradually stepping out of the small family circle.

　　Around 50 per cent of private companies have established limited companies and are expected to go public in the future.

　　He said they still have a long way to go for equal treatment with State-owned enterprises.

　　"There are still stumbling blocks to market entry, capital absorbing and employment,"he said.

　　Bao said more capital and high-level personnel should flow to private firms.

　　The majority of private enterprises are in the southeastern coastal areas, he said.

　　"Non-State-owned enterprises will be our new hope when some of the State-owned enterprises are struggling for their own survival,"he said.

　　The discrepancy between the dynamism of the private sector and its limited use of intermediated financing suggests that the private sector may not be able to sustain its current rate of growth unless it can increase its access to financing.