Clement Chow Kong-Wing at the time of writing this paper a lecture in the Nanyang Technological University, Singapore and now with the Hong Kong Institute of Business studies, Lingnan College. Small Business have been developing rapidly in china in the implementation of economic reform in the late 1978. This paper presents an empirical analysis to asses which socio-economic factors account for the entry exit proces of small individual enterprise focus only on short-term benefits. the following result were obtained. our empirical test confirms thatt private entrepreneurs only focus on short or medium term benefits because their entry exit decisions were affected by the temporary decision induced by the 1988 austerity programme. Small retailers enter or leave the retail sector gradually and the entry process is slowed than the exit process;3 factors like per capital national income, city-province and coatal inland difference, mobility of households, population density and growth are also relevant in accounting for the changes of entry-exit process either before or after the 1988 austerity programme.