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This paper aims to elaborate on the entrepreneurship development in China and the role of China's economic transition in Chinese entrepreneurial activities. The authors address China's institutional transition environment, which is argued as the necessary condition of entrepreneurship development and the 'Incubator' of three generations of entrepreneurial activities. They make use of a panel dataset from 31 provinces in China in the past 4 years. The results show that China's economic development has a significant inversed U-shaped impact on entrepreneurship development in China's transitional stage from an efficiency-driven to an innovation-driven economy. Further findings in the recent transitional stage show that education resource and regional economic openness respectively has significantly positive impact on entrepreneurship.
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