Abstract
In spite of remarkable results obtained, China requires more sophisticated economic structure and flexible institutions to foster its development in a more difficult context. Particularly important are the integration of public and private sectors, proper division of labor between them, and cooperative distinction of roles. The expansion of the private sector and entrepreneurship have been leading factors in China’s economic miracle. However, despite the numbers of new private enterprises increasing, their dynamic innovation slowed down in recent years. This negatively affects the sustainability of China’s economic growth. This paper considers several reasons for the attenuation of Chinese entrepreneurship and considers that it requires the revival of enterprise and ownership reform together with support to their innovative role. The latter should complement innovation in the public sector to counterbalance the biased structure and nature of Chinese innovation and afford new international challenges. This paper contributes to identifying solutions for reversing the deterioration of entrepreneurship in the frame of enterprises and ownership reform. Solutions lie in institutional innovation, like accelerating the pace of market-oriented reform, improving corporate governance for state-owned enterprises and commercial banks, strengthening domestic competitions, and deepening the mixed ownership reform.
