DR. CLEMENT K W. CHOW AND ERic W. K Tsang are both lecturers at the Nanyang Technological University, Singapore. This paper gives an overall picture of the development, functions and problems of private businesses in China since the economic reform which was formally announced in 1978. It starts with a review of the rapid growth of the private sector. Official statistics are quoted to support the discussion. The history of entrepreneurial development during the period is then traced, with special emphasis on the change of both the laws and composition of private business owners. It is followed by a discussion of the five social functions performed by private businesses. Finally, major problems incurred and faced by these private businesses are analysed.