Economy

Guangdong business owners worried about succession

By Zheng Caixiong (China Daily)
Updated: 2011-02-01 09:44

GUANGZHOU - A recent survey indicated that 51 percent of the owners of private business in Guangdong province are worried that their children are unwilling to carry on their families' businesses.

Meanwhile, more than 62 percent of the business owners fear their children are incapable of maintaining and strengthening such businesses.

The survey, which did not reveal the number of people whose views it sampled, was conducted by the Guangdong Federation of Industry and Commerce.

Although the results, on their face, were likely disappointing to those who want to see more family businesses perpetuated, they did leave some cause for optimism.

Of the survey respondents, 61.8 percent said they hoped their children would carry on their family firm in coming years.

Guangdong, which borders the Hong Kong and Macao special administrative regions, now lists more than 800,000 privately operated companies on its registers.

The first generation of Chinese owners of private companies, who started their businesses in late 1970s and early 1980s when the country introduced its reform and opening-up policy, is fast reaching retirement age.

Most members of that group will retire in five to 10 years, according to the survey.

And by the end of last year, only 12.6 percent of the private companies in Guangdong had been successfully taken over by the owners' children.

Another 21.1 percent, meanwhile, employed sons or daughters of owners as senior executives.

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Wang Jianchun, a professor at Guangdong University of Engineering, said: "I'm not surprised that young people refuse to take over their parents' businesses if they do not want to endure the stress they would encounter in business circles."

What's more, many of the sons or daughters of private business owners have attended college abroad and have views about the world that are different than those held by their parents.

According to the survey, 40.2 percent of those in the first generation of private business owners sent their children abroad for schooling. For some of those children, study in a foreign land began in high school or even elementary school.

As a result, the younger generation - influenced by new ideas and things encountered elsewhere in the world - was no longer interested in the traditional industries that their parents had been devoted to, Guangzhou Daily cited the survey report as saying.

According to the survey, 13.4 percent of the children born to the first generation of private businesses owners have started their own companies using financial aid from their parents.