Using a large survey sample of manufacturing firms between 2003 and 2006, the majority of them not listed on either stock exchange, we studied financing behavior in China and tested a series of hypotheses about the determinants of firm leverage as derived from the pecking-order theory. Overall our results show that the theory well explains private firm financing where the amount of leverage is negatively related to profits, liquidity, and age, and positively related to firm size and average leverage ratio. However, different ownership types and firms located in different market environments do not have the same determinants of leverage, and their financing behavior is not well explained by the pecking-order theory. This suggests that China's economic and financial reforms have not yet been completed.