57 reported that Zhou Yuanqing.vice-minister of education publicly called for China to produce more scientists,academics and entrepreneurs in order to compete internationally. The Communist Party of China has indicated that future economic policy would concentrate on blending agriculture and industrialization in an attempt to slow the mass migration into major urban areas.Township and local village private enterprise development has been considered a vital supplement to the state agriculture sector.For example the"Spark Program"was designed to stimulate agriculture and light industrial development in rural areas and had created 20.000 projects between 1986 and 1999(Dana.1999). Entrepreneurship and the continued development of private enterprise are vital to China's economic pr The of cntepieRreneuna7ede7 perity and stability for decades to com nent's ing ent with erprises SMEs) to Rev emergen n (1999)an )cited examples as financial servic estate,subcontra restaurants and the entertainment sectors egun to flourish The People's Republic of China provides a unique living laboratory in which to explo entrepreneurship and small business development.Although there has been an emerging body of knowledge about entrepreneurship and private enterprise development in the Chinese context,few in-depth empirical investigations have been made to date.Siu and Kirby (1999) pointed out that the opening of the Chinese economy provides an opportunity for extended research into Mainland China where small and medium sized enterprises have begun to play an increasingly important role in the development of the economy.Consequently,researchers have a unique opportunity to identify,probe,and analyze the characteristics of both Chinese entrepreneurs and the enterprises they are developing. China has embarked on a process of transforming a centrally planned economy into a market driven economy.Entrepreneurial development has played and will continue to play a critical role in the transition One interesting au stion is that s en the chinese economic and cultural environ to what extent of Chin ese entrepre rs are different from each ther In this paper are intere ested in the of how Ch hat extent the s differ mb demograp variable such gende and perience explore be ng pa emns and g tion period the time s/he s to create a Internal and External Financing China has embarked on a side by side economic policy of capitalism and socialism.It has adopted entrepreneurship as the vehicle through which it will privatize the economy and create new jobs.China needs a 6%growth rate to keep up with the number of new job seekers As such.it needs to create an institutional mechanism for entrepreneurial support and financing.The propensity of a country to produce entrepreneurial firms is thus based on its willingness to provide infrastructural programs to move its transition economy into a privatized mode.Thus it needs transforming institutions to establish more favorable set of conditions such as providing financing for new businesses. If this institutional process fails to come about,an alternative method of financing is left to the individual or his or her family.This is the family network who.through years of savings offer their financial support to individual family members who embark upon their57 reported that Zhou Yuanqing, vice-minister of education publicly called for China to produce more scientists, academics and entrepreneurs in order to compete internationally. The Communist Party of China has indicated that future economic policy would concentrate on blending agriculture and industrialization in an attempt to slow the mass migration into major urban areas. Township and local village private enterprise development has been considered a vital supplement to the state agriculture sector. For example the “Spark Program” was designed to stimulate agriculture and light industrial development in rural areas and had created 20,000 projects between 1986 and 1999 (Dana, 1999). Entrepreneurship and the continued development of private enterprise are vital to China’s economic prosperity and stability for decades to come. The government’s policy of using entrepreneurial led small and medium size enterprises (SMEs) as a supplement to state enterprise in combination with China’s ongoing “Consumer Revolution” is creating a new emergent class of tertiary industries. Both Dana (1999) and Davis (2000) cited examples such as financial services, real estate, subcontracting, restaurants and the entertainment sectors where entrepreneurial activity have begun to flourish. The People’s Republic of China provides a unique living laboratory in which to explore entrepreneurship and small business development. Although there has been an emerging body of knowledge about entrepreneurship and private enterprise development in the Chinese context, few in-depth empirical investigations have been made to date. Siu and Kirby (1999) pointed out that the opening of the Chinese economy provides an opportunity for extended research into Mainland China where small and medium sized enterprises have begun to play an increasingly important role in the development of the economy. Consequently, researchers have a unique opportunity to identify, probe, and analyze the characteristics of both Chinese entrepreneurs and the enterprises they are developing. China has embarked on a process of transforming a centrally planned economy into a market driven economy. Entrepreneurial development has played and will continue to play a critical role in the transition. One interesting question is that given the Chinese economic and cultural environment, to what extent, venture financing of Chinese entrepreneurs are different from each other. In this paper, we are particularly interested in the question of how Chinese entrepreneurs finance their startups, and to what extent these patterns differ across a number of demographic variables such as age, gender, education and experience. We also explore the relationship between financing patterns and gestation period – the time s/he takes to create a new business, i.e. from the idea to implementation. Internal and External Financing China has embarked on a side by side economic policy of capitalism and socialism. It has adopted entrepreneurship as the vehicle through which it will privatize the economy and create new jobs. China needs a 6% growth rate to keep up with the number of new job seekers. As such, it needs to create an institutional mechanism for entrepreneurial support and financing. The propensity of a country to produce entrepreneurial firms is thus based on its willingness to provide infrastructural programs to move its transition economy into a privatized mode. Thus it needs transforming institutions to establish more favorable set of conditions such as providing financing for new businesses. If this institutional process fails to come about, an alternative method of financing is left to the individual or his or her family. This is the family network who, through years of savings, offer their financial support to individual family members who embark upon their