This article argues that the Chinese Communist Party (CCP) utilizes informal institutions to control entrepreneurs in the PRC. Scholars generally believe that the CCP satisfies entrepreneurs' interests. Some of them claim the CCP is made up of the young and the highly-educated businessmen, who make policies and organizations in order to channel interest articulation. But this claim does not take into account the fact that the state often follows entrepreneurs' actions. Other scholars contend that entrepreneurial interests are satisfied by the adaptive informal institutions that are formed with local officials. They do not explain that the life span of most enterprises in the PRC has been very short, and continues to become shorter. Nonetheless, the CCP still meets the needs of entrepreneurs. Through in-depth case-studies derived from fieldwork in different provinces, this paper comes to the conclusion that most entrepreneurs agree that guanxi (connection) with officials is helpful for running a business. However, under the premise that everybody needs guanxi, the existence of juan-zi (social circle) makes entrepreneurs in the closer circle obtain relative advantage that enables them to survive in the long term. These entrepreneurs are always in controversial situations where they support the regime to be a participant in the juan-zi, even though they are dissatisfied with the policies. As a result, we can better understand how the CCP controls entrepreneurs through studying this ＂soft＂ control style that is found throughout this paper.