On Risks Facing China's Growing Privately Owned Enterprises And Related Countermeasure

In the twenty years after the Chinese government adopted the Opening and Reform Policy, China's privately-owned enterprises, the had been newly emerging things, have gone a long way to become bigger and stronger, developing with the time and making great achievement. Today, as the backbone of the national economy and an inseparable part of China's Socialism Market Economy, it plays an important role in improving social productivity. However, all those achievements were not obtained without difficulty. Many of the enterprises have experienced hard times; some of them even went bankruptcy at last. With the further deepening of the Reform and Opening and China's entry into WTO, China's privately-owned enterprises will face greater impact and challenge. Therefore, it's an urgent task for Chinese scholars to study the sustainable development for China's privately-owned enterprises.Combining Theoretical Analysis with Practical Analysis, thepaper systematically states on the laws governing the development of China's privately-owned enterprises on the different stages of its lifecycle, and the risks and traps in its course of development, as well as the strategic countermeasures to take.First, the paper clearly defined the concept, connotation and types of China's privately-owned enterprises, stating on its developmental course, its features and the problems to which close attention should be paid.Second, applying the Lifecycle Theory for Enterprises to China's privately-owned enterprises, the paper comes up with the idea of dividing the developmental course of China's privately-owned enterprise into different stages, which is determined by the scale, sales growth rate and the features of different stages of the enterprise's lifecycle. Thus, offering a method for privately -owned enterprises to be aware of the stage they are in.Third, stating on all kinds of risks and traps privately-owned enterprises may face in different developmental stages.Forth, putting forward suggestions accordingly, such ss cautiously choosing strategies, accelerating capital circulation, setting up management system, building up managing team, promoting organizational innovation, creating corporation culture, etc.Fifth, the paper takes as an example the experience of Wanke Group to discuss the theory and methods on how to avoid the risksduring the development of China's privately-owned enterprises.The paper is helpful for China's privately-owned enterprises to solve the operational and strategic problems that may occur in their lifecycle.