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The Chinese Private Economy

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The private economy can generally be able to add more revenue income to the general state treasury since private enterprises generally tend to have greater turnover and output value. The tendency by most Chinese to create family firms helps these firms in securing some of the inherent advantages of these firms that includes common goals and trust. The trust that it sees to be widely prevalent in these firms is seen to greatly improve the working environment of these firms as the different family members working in the firm all want the firm to succeed and grow as this will result in better gains for themselves.

The open interdependence, shared goals, openness, and cooperation that exists in these firms help to further positively serve these companies (Schlevogt, 2002). Family firms also cause the family members working in them to display relatively very strong motivation and dedication to these firms due to the fact that there exists a sense of belonging and ownership to these firms exhibited by the different family member (Yeung, 2003). Another inherent advantage is that these firms offer various family members working in them the opportunity to have relatively flexible and often long working hours as well as pay (Rowley and Warner, 2005).

This is mainly due to the willingness of family members to help out each other as a result of the relationship that exists between them. The pay is given to the persons working in these firms also tends to be fairer as compared to the pay that is given in other business models where selfish motives are seen to be prevalent. There are several disadvantages of the private economy approach aspect of the china business model key among these disadvantages is the limited market available to this market.

As a result of the adoption of the family firm structure, the business model is also seen to be plagued by problems limiting its access to capital that is sometimes to be essential for business growth and expansion (Phan and Butler, 2008).  

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