Chinas private economy will change hands in the next decade
A big part of Chinas private economy will change hands in the next decade, from first-generation entrepreneurs to their children, many of whom are foreign-educated and have a very different view about running a business than their parents do.
I believe the government needs to face our generation, the daughter of Chinas second-richest man was quoted as saying in Guangzhous Time Weekly. Our generation can never be like my fathers generation. Ms. Zong, who attended high school and college in California, declined to comment directly but acknowledged she made the comments to the Time Weekly.
Ms. Zong may be particularly outspoken, but the children of Chinas most successful entrepreneurs in general have little patience for the endless wining and dining of government officials that is necessary to do business in China. And they are not the nuts-and-bolts, get-their-hands-dirty managers that their parents are.rents businesses into service industries in sectors such as health care and finance that are important areas in Chinas economic overhaul. Others are following their parents entrepreneurial spirit. Either way, the government faces the question of how to embrace this homegrown resource even if this generation doesn't follow standard Chinese business practices.
It is harder to be an entrepreneur in China compared to in the West, but there are also more opportunities here, said Duan Liuwen, who heads up an organization for second-generation wealthy called Relay China that has about 200 members. The good thing is the government is changing, too; even in the government there are more overseas returnees.
Mr. Duan, 32 years old, has a relatively unusual background. His father, Duan Yongji, one of Chinas most successful technology entrepreneurs and former chairman for Sina Corp., was worried that his son might get spoiled, so he sent him to a military college in Chongqing to study to be a doctor.
Mr. Duan tried a few times to escape the school by scaling its walls, but ultimately graduated and went on to the Wharton School at the University of Pennsylvania. He later returned to China to set up Halation Photonics Corp., a display-technology company. Mr. Duan sees no benefit to working for his father. When I worked at Sina, no one would give me any real work, but the credit all came to me when it was done, he said.
Karen Chens parents built a profitable property business around Shanghai, but with the government trying to rein in real-estate prices, the business is struggling to grow. Ms. Chen is now building senior-citizen homes, which is encouraged by China as the population ages.
Armed with an economics degree from a Canadian University, she also started a micro-financing business, to help women in small businesses. And she is working with a co-founder of peer-to-peer finance company Lendingclub.com to build a similar company in China.
I have to change the business model and do the right things to keep the business alive, said the 29-year-old Ms. Chen. My education abroad has helped us to look at the long term and think about ways to combine businesses with social responsibility.
Similarly, Yoyo Yao is adding modern management style and ideas that fit with Chinas long-term development goals to her familys property business. She is trying to build a plastic-surgery center in Hebei province, after seeing a lot of Chinese going to Korea for such services. The development, about three hours north of Beijing, covers an area about 10 times the size of Monaco.
When I was little, I didn't want to go into properties, thinking its not very elegant for ladies, said Ms. Yao. My father says, now you have finally started to pay attention.
Some second-generation wealthy Chinese have chosen to stay abroad, because they are pessimistic about the Chinese economy. Carl Meng, who got a masters from Cambridge University, is one of them. It will be difficult for me to adjust to the Chinese way of doing things, said Mr. Meng, who now works for an investment bank in London. The Chinese economy looks like a dead end and my parents don't mind me staying abroad either.
Im quite optimistic about Chinas second generation, said Rupert Hoogewerf, founder of Hurun China Rich list. They have good education, broad experiences, and a lot of DNA close to their parents, who have succeeded against all odds.
