ABSTRACT
After the establishment of People’s Republic of China in 1949, the Communist Party launched one campaign after another to replace private ownership with public ownership. Private enterprises were by and large looked down at as an “ugly duckling” in the whole socialist planning period, particularly during the Cultural Revolution when any private businesses and economic activities were taken as “capitalist seedling” that had to be eradicated. Under the hostile policy, the private economy shrank dramatically, with the share of the private economy in the value of industrial output declining from 55.2% in 1952 to 0.2% in 1978. Along with market-oriented reforms after 1978, the private economy began to revive spontaneously, and the government relaxed its policy toward the private economy.
