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of market economy with Chinese characteristics. It is necessary to remedy the situation after problems come out, not picky, focus on matter but not person; Chinese entrepreneur team will learn a lot from many cases and will benefit from development of market economy.

Chapter four: Policy control gains and losses in development space of Chinese entrepreneurs and case study( Methodology)中国企业家发展空间政策控制损益与案例研究（方法论）

(A) Errors in the early implementation of policies
Entrepreneurs deeply felt opportunities and challenges from policy-inclined in development space since three years of reform and opening up with rise of many Chinese enterprises groups. (Li Yining, 2002), at the beginning of reform and opening up, decentralization, tax cuts provided a bold ‘business sea’ opportunity to many eager companies. Communiqué in the third session of eleventh central committee of the party clearly pointed out that a serious defect of China's economic management system is too much concentration of rights; they should be bold decentralized, so that locals and enterprises will have more operational and managerial decisions. (Cao Jianhai, 2004) state-owned enterprises reform started from reform pilot about the expansion of rights since it is the core part of economic reform, it mainly featured in two aspects: first is to mainly rely on planned economy with due attention to the supplementary role of market regulation, adjust the relationship between the state and enterprises; second is to expand business autonomy, and connect enterprises performance with material interests of workers, focusing on mobilize enthusiasm and initiatives from enterprises and workers. In July 1979, China's State Council formally issued five rights expansion documents, e.g., ‘certain provisions about expansion of autonomy of state-owned industrial enterprises’ business management,’ ‘provisions about state-owned enterprises on profit retention’ and so on. (Li Yining, 2005) from July 1979 to June 1980, pilots to expand autonomy of enterprises have been reached to 60% of China's industrial production budget, as for profit 70% of 6600 state-owned enterprises, Shanghai, Tianjin pilot enterprises’ profits reached to more than 80%, Beijing reached to 94%. After Decentralization, production efficiency was not significantly increased, and soon appeared economic disorder, fiscal deficit, inflation and other ills surges. At the end of 1980, the central decided ‘to further adjust national economy’, state-owned enterprises then from ‘expanding rights’ reforms to the completion of national plans to strengthen the ‘accountability.’
After that, the state again opened many pilots in Beijing, Shanghai, Guangdong provinces as well as industrials in light industry, tourism and other industries. (‘Loan instead of give’ means the short name that loan investment capital of infrastructure instead of give) From January 1985, ‘Loan instead of give’ was fully implemented in all sectors in the country. This policy was actually for state-owned enterprises to totally replace the State and fully committed to economic responsibility. (Wang Jun, 2003), heavy taxes and surrenders pressed enterprises to be away with any accumulation; they could not return to bank capital. In fact, most enterprises were even difficult to bear with interest, only loans to pay interest by then, old debt by new debt, therefore, debt piled up and ‘debt chains’ situation came out.