World starts to see new breed of rich

China Daily (Canada) - - PEOPLE -

China’s se­cond-gen­er­a­tion wealthy chil­dren are emerg­ing into the spot­light, es­pe­cially with the coun­try’s first wave of suc­cess­ful pri­vate firms reach­ing the suc­ces­sion stage.

Un­like fam­ily busi­nesses in ma­ture Western mar­kets, China’s lead­ing fam­ily busi­nesses were es­tab­lished mostly af­ter the coun­try’s re­form and open­ing-up started at the end of the 1970s.

A lack of suc­ces­sion plans is un­der­stand­able, given that the un­prece­dented eco­nomic growth that China has had in the past 30 years has meant the coun­try’s top en­trepreneurs never dreamed of the wealth they would achieve.

Mean­while, many of China’s se­cond-gen­er­a­tion wealthy chil­dren, ed­u­cated abroad, are in­de­pen­dent minded with their own ca­reer as­pi­ra­tions that don’t nec­es­sar­ily in­clude re­turn­ing to fam­ily firms. Ac­cord­ing to a sur­vey of 500 Chi­nese fam­ily firms re­leased last year, only 20.5 per­cent of the chil­dren want to take up the ba­ton from their par­ents.

“The fu­ture de­vel­op­ment of Chi­nese fam­ily firms is very sig­nif­i­cant be­cause pri­vate firms are the fu­ture driv­ers of China’s econ­omy as it now en­ters a stage of struc­tural shift, and most of th­ese pri­vate firms are fam­ily-owned,” said Eric Thun, as­so­ciate pro­fes­sor in Chi­nese busi­ness stud­ies at Said Busi­ness School at the Univer­sity of Ox­ford.

More than 85 per­cent of the coun­try’s pri­vate com­pa­nies are fam­ily-owned busi­nesses, and by July, 747 of th­ese firms were listed on China’s stock mar­kets, ac­cord­ing to the sur­vey.

In the past few years, “fam­ily of­fices”, which ad­vise the rich on wealth man­age­ment, suc­ces­sion and other is­sues, mush­roomed in China.

“Ex­po­sure to an in­ter­na­tional en­vi­ron­ment is im­por­tant be­cause they can learn from other es­tab­lished fam­ily busi­nesses in Europe, and take th­ese lessons back to China,” said An­ton Dav­i­denko, of the Lon­don-based fam­ily of­fice Or­a­cle Cap­i­tal Group.

Hence, the young lead­ers of China’s fu­ture fam­ily firms are mostly likely to be in­ter­na­tion­ally ed­u­cated. “They could be­come pow­er­ful bridges be­tween China and the West,” Thun said.

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