In recent years, the uncertainty of global economic development has risen, and the private wealth of major countries around the world has been affected to varying degrees. For the second time in 15 years, the number of high-net-worth households in China has declined, and total wealth has also fallen by 3.6% from the previous year. The total amount of wealth held by ultra-high-net-worth individuals with a net worth of $30 million or more shrank by 10%, and the average in Europe and the United States shrank by more than 10 percentage points. According to the 2023 Hurun Wealth Report, within 10 years, China will have 21 trillion yuan of wealth passed on to the next generation, 49 trillion yuan of wealth will be passed on to the next generation within 20 years, and 84 trillion yuan of wealth will be passed on to the next generation within 30 years.
Image source: Sina Weibo
Wealth inheritance has become a mainstream topic, and more and more high-net-worth individuals are concerned about the education and inheritance of their children. Meng Wanzhou, the eldest daughter of Ren Zhengfei, He Chaoqiong, the daughter of gambling king Stanley Ho, Chen Danxia, the daughter of Chen Kaichen, one of the founders of Liby Group, Zhu Jurong, the daughter of Zhu Mengyi of Hopson Development Group, and Xu Yangyang, the daughter of Xu Shihui of High Fashion Group, are becoming a beautiful landscape in China's business circles.
Older generation of entrepreneurs and heirs
In the past two years, more and more new generations in China have completed the handover and stepped into the center of the stage, and a group of successors are coming to China's business rivers and lakes. Recently, the lithium giant Tianqi Lithium issued an announcement that Mr. Jiang Weiping applied for resignation as chairman of the company, and the board of directors agreed to elect Ms. Jiang Anqi as the chairman of the company, and at the same time changed to the company's legal representative, Jiang Anqi is Jiang Weiping's daughter. Similar to most second-generation succession paths, Jiang Anqi has been honing in Tianqi Lithium for several years. Born in 1987, MBA from Southwestern University of Finance and Economics, with nearly ten years of experience in the lithium industry, he walked from behind the scenes to the front of the stage and took over the scepter in the hands of his father.
Family business succession is key to the growth and development of a family business, and its leadership succession shows unique complexity and wider implications than the average business. In the U.S., 30% of family businesses survive in the second generation: only 12% survive in the third generation; Only 3% remained in the fourth generation and beyond. In Portugal there is a saying "rich peasant - noble son - poor grandson", in Spain there is also a saying "hotel owner, son rich man, grandson begging", and in Germany there is a word "creation, inheritance, destruction", which is also used to represent the fate of three generations. Many glamorous family businesses have been eclipsed or even disintegrated after the generational change, which is all a sigh of relief. Therefore, how to solve the contradiction in the transfer of power in family enterprises and successfully complete the succession of enterprises has always been an important research topic in the business and academic circles at home and abroad.
Image source: Phoenix.com
Another high-profile heir is Huawei's eldest princess - Meng Wanzhou. Before and after Meng Wanzhou's detention in Canada, Ren Zhengfei repeatedly stated that Meng Wanzhou would not become Huawei's successor, and Meng Wanzhou became the rotating chairman of the board of directors in the future. Liu Ping, former vice president of Huawei, mentioned Ren Zhengfei's son Ren Ping and daughter Meng Wanzhou in "Huawei's Past", he wrote, "No matter how great Mr. Ren is, he can't escape the traditional Chinese concept of 'father and son'", "Mr. Ren has made all preparations for Ren Ping's succession, including the management platform, assisting the minister, and now waiting for Ren Ping's growth."
Picture: Meng Wanzhou, Vice Chairman, Rotating Chairman, and CFO of Huawei Image source: Sohu
More and more post-90s second-generation people have begun to come to the front of the stage, getting involved in or taking the helm of listed companies with a market value of tens of billions or even hundreds of billions. On March 27, the listed company Canny Elevator issued an announcement that the founder Wang Youlin resigned as chairman, and the new chairman was Mr. Zhu Linhao. After further investigation, Zhu Linhao, who was born in 1992, is Wang Youlin's son, and Wang Youlin's other daughter Zhu Linyi is also a company executive. Just as Li Ka-shing's post-95 granddaughter Li Side joined the family's listed company last year, Gao Haichun, the second generation of Trina Solar's daughter with a market value of 100 billion yuan, came to the stage. At the beginning of this month, Ganfeng Lithium announced that the board of directors deliberated and approved the proposal to appoint the company's new vice president, and agreed to appoint Li Chenglin and Wang Bin as vice presidents of Ganfeng Lithium. It is worth noting that Li Chenglin is the son of Li Liangbin, the actual controller and chairman of the company. Born in 1996, Li graduated from the University of Southern California with a major in economics. Since 2022, Li Chenglin has joined Ganfeng Lithium and has served as the manager of the company's investment department and assistant to the president. While taking over as the vice president of Ganfeng Lithium, Li Chenglin also served as a director of Zhili Technology and Ganfeng Lithium Battery. This change of position is also seen as a signal for the cultivation of second-generation successors. Also in the energy field, a post-90s female second generation came to the front of the stage. In April last year, Trina Solar announced that it planned to spin off and list its holding subsidiary, Jiangsu Trina Smart Distributed Energy Co., Ltd. (hereinafter referred to as "Trina Smart"). Among them, the head of the company is Gao Haichun, the daughter of Gao Jifan, chairman of Trina Solar.
A large number of private enterprises in China have come to the baton node
At present, the age group of family entrepreneurs in China is around 55-75 years old. At present, this means that in the next 10 years, a large number of private enterprises in China will come to the baton node, and a new generation of successors will begin to intensively appear on the stage of the group. Family business succession is a worldwide problem and the ultimate challenge for entrepreneurs. The father of modern management, Peter Brown. Drucker once said: Any manager must have a plan and awareness of cultivating successors, and cultivating qualified successors is more important than implementing a new strategy.
Zong Fuli, the daughter of Wahaha founder Zong Qinghou, started from the grassroots level in Wahaha, and with the image of the "Iron Lady" of "the earliest to the company and the latest to go home", she has experienced nearly 20 years, and it was not until February 23, 2024 that she succeeded her father as the legal representative of Hangzhou Wahaha E-commerce Co., Ltd. Liu Chang, the only daughter of Liu Yonghao, the founder of New Hope Investment Group, went to the United States to study at the age of 16, and soon after returning to China, she entered New Hope Dairy Holdings Co., Ltd., a subsidiary of New Hope Group. Liu Yonghao also said, "At least you have to score more than 85 points."
Picture: Zong Qinghou's daughter, vice chairman and general manager of Wahaha Group Image source: Sina.com
The average birth year of the founders of China's top 100 family businesses was in the late 1950s, and now the first batch of family businesses are or will soon undergo the test of business succession. And on the question of "to whom", the inheritance of the father's business by the son is often the collective subconscious of the entrepreneur. Therefore, these second-generation generations are often planned to have a more consistent growth path: they graduated from famous overseas universities in their early years and learned experience in finance and management. After returning from school, he entered the family business from the grassroots level, transferred to various business departments, and gradually moved towards the center of power.
Having been exposed to the entrepreneurial spirit of their parents since childhood, many second-generation people are still able to fulfill their expectations. For example, since his father Liu Yonghao took over the banner of New Hope, Liu Chang has implemented comprehensive reforms, led New Hope to turn the situation around, and promoted the scientific and technological transformation of the entire group. In 2023, Liu Chang will take over the family investment and become the chairman and director of New Hope Investment Group, creating the second growth curve for New Hope. And Zong Fuli. Today, in the Wahaha system, Zong Fuli has been associated with hundreds of enterprises, covering food and beverage, machinery manufacturing, packaging and printing, investment management, etc., and has served as the legal representative, chairman, executive director, director and other key positions.
However, not every second-generation successor can smoothly pass every hurdle. At the beginning of this year, Meibang Apparel issued an announcement that Hu Jiajia, the daughter of Zhou Chengjian and chairman of Meibang Apparel, announced his resignation, and Zhou Chengjian was re-nominated as a director. There are only a few second generations who can successfully complete the business inheritance, and their children are not suitable or unwilling to take over, blocking the way for most family businesses to inherit. Another option is to leave the money in the hands of a professional to ensure that the family's wealth is passed on from generation to generation. As Zong Qinghou once expressed a view in an interview, "China's private enterprises will eventually be the same as developed countries, the second generation will take over if they are willing to take over, and if they are not willing to take over, professional managers will manage the enterprise." "Under the torrent of the times, how to stabilize the country laid by the parents has become a new journey for the new generation.
Fig Hu Jiajia, daughter of Zhou Chengjian and chairman of Meibang Clothing Image source: Sina Weibo
The growth environment of the first generation and the second generation of entrepreneurs is very different, and the second generation is more willing to start their own business and other factors, and the growth path and final choice of the second generation will not be the same because they are named the second generation. Ding Jiamin, the second daughter of Xtep Group, once bluntly said in an interview that in the world played by her parents, how to make her own achievements is the unanimous topic of the second generation. This includes the situation that as a "second generation", you need to keep up with the times and market changes to start a business.
Today, the story of entrepreneurship has turned the page, and the story of keeping a business has just begun. Under the torrent of the times, how to stabilize the country laid by the parents has become a new journey for the new generation. Today's industrial structure is changing faster than ever before, and perhaps the transmission of spirit and skills is more important than the inheritance of wealth. Entrepreneurs can take learning and thinking about the sustainable development of their families as seriously as they learn to manage a business, establish a family belief system, and pass on their entrepreneurial spirit and business philosophy from generation to generation.
Source: Wall Street News, Zhihu, China Economic Net
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