The dramatic growth of the private small-medium enterprises (SMEs) in China can be deemed as one of the driving forces of the successful economic change of that country. The high growth rate in output, employment, investment and productivity reflects the dynamism of this sector: its share in GDP is now over 33%. Recent surveys, however, have revealed that most of the private SMEs are still constrained by the institutional framework (they have been recognized by law in 1998) as well as by their small scale, technical inefficiency, opaque corporate governance, lacking investments. These factors do affect, of course, private enterprises'market strategies and their competitiveness in the globalised economy. During the last years, Chinese government has often declared its pledge to support the business and technological improvement of private enterprises both by fostering the linkages between them and the large corporations (domestic and multinational ones) and implementing pro- active policies. This task, however, is not easy to carry out successfully. Many Chinese economists as well as policymakers, are, in fact, raising some doubts on the role of these small, often tiny, enterprises in the growth strategy of their country. Notwithstanding small scale enterprises'ability to generate employment and income, in developing countries they are often associated with environmental pollution, poor quality of products, negligence toward workers'rights, tax evasion. The surveys carried out in China do confirm the «informality» of this sector and its scarce propensity to the corporate social responsibility. This picture contrasts with the project of modernization, which, according to the latest formulations by the Chinese communist leadership, means a pattern of growth relied on the quality (no longer on quantity) of production, life and natural environment. That means, in the words utilized by the Chinese policymakers, the transformation of a «large» manufacturing country into a «strong» manufacturing country.