The survey indicates that the proportion of private entrepreneurs with college or university diplomas jumped from 16.6 percent in 1993 to 33.5 percent in 2002.

It shows that former government officials, managerial personnel of state-owned enterprises and technical professionals make up 67.4 percent of private business owners, up from 33.8 percent in 2004. In contrast, the ratio of workers, farmers and service-trade personnel turned entrepreneurs dropped from 57.9 percent to 26.7 percent.

Though the survey shows that about 70.8 percent of the entrepreneurs consider business to be their top priority, there are those who hope to be elected members of the National People's Congress (NPC) or the Chinese People's Political Consultative Conference (CPPCC). And less ambitious ones hope for memberships in local people's congresses or CPPCC local committees.

Although the survey reflects the rising desire of such people to engage in politics, their enthusiasm contrasts with their political position. In fact, they can only assume low-ranking posts in political or economic organizations, and their proportion is small. Moreover, such posts are concentrated in economic rather than political organizations.

CPC members comprised 32.2 percent of the private owners who registered their businesses after 2001. The majority of the private business owners with CPC affiliations once used to work for party or government organizations, with many of them serving as directors or managers of state-owned or collectively-owned enterprises.

That means private business ownership is becoming elite-oriented, says Bao Yujun, Director of the All-China Association for Private Business Studies. That's why the new generation of entrepreneurs yearns for recognition and understanding from society.

"It is a fundamental change and signals social progress. China lacks such highly educated entrepreneurs," said Bao Yujun, at the news conference in Beijing to detail results of the survey.

Management defects and challenges

Four in five private enterprises in China have not signed job contracts with their employees, according to the result of a survey by the country's top legislators.

"The legal rights of employees were frequently violated in more than 80 percent of private companies, especially in real estate, light industry, clothing and catering," said He Luli, Vice Chairwoman of the Standing Committee of the NPC.

According to the Labor Law that came into effect in 1995, a contract between employer and employee is mandatory. Administrative labor departments are authorized to force dithering employers to sign contracts with employees if the delay is intentional.

The lack of contracts leaves workers in a legal limbo: They cannot seek termination benefits should they be asked to leave; they have no right to medical treatment even in case of a workplace accident; and employers do not contribute their share to the pension fund.

The legislators found that even among the fewer than 20 percent of private companies that signed contracts with employees, the duration was mostly less than one year.

"The employers refused to sign long-term contracts to avoid legal obligations," He added. And many contracts only prescribed the obligations of employees and the rights of employers.

"Some contracts even stated that the employer holds no responsibility for the illness or even death of its employees, even when injuries occur in the workplace," she said.

She urged the Central Government to adopt effective measures so that all companies are compelled to sign contracts with employees. "As a contract is a legal and binding agreement that states the obligations and rights of employers and employees, it is of fundamental importance to safeguard the interests of laborers," she continued.

In addition, legislators also found problems with salary payment and social insurance. According to an investigation in April 2006, 13 percent of employees' salaries were lower than the national minimum salary and 8 percent of employees surveyed did not receive payments on time or at all. Many private companies also refused to insure their employees.

Figures from the All-China Federation of Trade Unions show that more than 100 billion yuan was owed in unpaid wages to migrant laborers in China last year.

The survey of nearly 4,000 private companies shows that 85 percent find it hard to obtain loans. Dai Jianzhong, a researcher at the Beijing Academy of Social Sciences, said that Chinese banks, which put financial security first, still prefer lending money to big enterprises.

Besides, overcharged management fees and defaulted debts still remain problems.

Bao Yujun said the survey included a question about the issues that private enterprises are most concerned about.

"They expect taxation reform soon, and want the protection of private property granted in the Constitution to be implemented," Bao said. "They also hope the government's role in economic management will change and a social credit system and market order will be established."