Perhaps the most challenging issue for China’s private businesses in the years ahead is how they deal with succession. Given the country’s brief 30 year experience with a market economy, China’s family businesses have yet to fully embrace succession. That, of course, is changing – as the founder generation begins to transition to the second generation. But what is becoming increasingly clear is that China wants to shape its own thinking on succession, which borrows ideas from the west, but is also about something that feels distinct for themselves.
At many levels, passing the business to the next generation is no different for family-owned businesses in China than it is for other family businesses anywhere else. They face the same set of challenges, such as getting the next generation prepared and committed to taking over management plus encouraging the senior generation to let go in time. The ultimate goal, for any business, is to maintain both the momentum of the business and the family. That’s no different for China’s family businesses.