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People's Daily Online>>China Business

Succession problem threatens China's family firms (2)


08:41, December 13, 2011

Li Huisen, a senior executive with sauce manufacturer Lee Kum Kee, said for many Chinese family businesses, keeping growing was more difficult than starting. "How to sustain business development for generations is a question that needs to be answered by all of Chinese family business owners," he said.

The problem is made more pressing by the important part that family business have to play in driving the Chinese economy. Citing figures from a survey done last year, the report said 85.4 percent of China's private enterprises belong to family businesses, in which individuals or families own a controlling stake of more than 50 percent.

Furthermore, of the country's private businesses, 55.5 percent are family firms in which the controlling family members are actually involved in corporate management.

China's family businesses, mostly formed after the country's drive to reform and open up three decades ago, are mainly based in the east of the country and focus on the manufacturing sector.

In comparison to 1996, when more family firms specialized in the catering industry, by 2009, an increasing number had become involved in wholesale and retail, a trend that tallied with China's economic development, according to the report.

Statistics indicated that 36.9 percent of the 762 listed private companies in China's A-share stock market (which, as of the end of last year, had a total of 2,063 listed companies) were family firms.

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