Values and purpose create

competitive advantage for

family businesses

Global Family Business Survey 2018 –

China Report
Table of
Executive Summary......................................................................................................... 2

Introduction..................................................................................................................... 8

Contents Chapter 1 – Growth through higher sales..................................................................... 10

Family businesses report higher sales growth.............................................................. 11
Family businesses are active strategic planners........................................................... 15

Chapter 2 – Challenges faced by family businesses .................................................... 17

The pressing need to innovate...................................................................................... 18
Conflict management is still taboo................................................................................ 20
Diversity through female representation is lagging....................................................... 21

Chapter 3 – Family and corporate values enhance reputation and sustainability......... 22

Chapter 4 – Preparation to ensure legacy and business continuity.............................. 25

Greater scope for philanthropy..................................................................................... 26
Fewer next generation family members are working in the business........................... 27
Family businesses are less inclined to plan for succession.......................................... 28
Protecting the business as the most important family asset is key.............................. 31

Conclusion.................................................................................................................... 32

Methodology and sample composition......................................................................... 33

Contacts........................................................................................................................ 35

Endnotes....................................................................................................................... 36

Acknowledgements....................................................................................................... 37

Global Family Business Survey 2018 – China Report 1

Executive
Summary

Global Family Business Survey 2018 – China Report 2

Mr. Li Ka-shing, one of the most famous entrepreneurs The key findings from this report are as follows:
in Hong Kong announced his retirement in March this
year and handed over the reins of his conglomerate to Family businesses have seen higher sales growth over the past 12 months compared to the global
his son Victor Li. While Victor has been groomed over average and are active strategic planners
the past many decades, analysts are watching to see
• More family businesses on the mainland have seen higher sales growth over the past 12 months
how he will oversee the empire his father has built. Mr. Li
(75%) compared to the global average (69%). Out of this, 67% of mainland respondents
plans to spend more time on his charitable foundation to
saw double digit year-on-year growth in 2018, roughly double the global proportion of 34%.
which he has devoted one-third of his assets. Referring
Additionally, close to all mainland family business executives have a strategic plan for the next
to the foundation as his “third son”, he aims to reinforce
three to five years (96% compared to 79% globally).
the business’s values of being committed to the
communities it operates in. Family businesses are more bullish than global counterparts in terms of growth aspirations over a two
year time horizon
Succession planning is indeed critical for family
businesses hoping to create a lasting legacy. This is • In China, 26% of family businesses expressed “quick and aggressive” growth aspirations over a
particularly true for Asian businesses founded after the two year time horizon compared to 16% of their global counterparts. In terms of “steady growth”
Second World War that are now transferring their wealth aspirations over a two year time frame, 51% of Chinese family businesses shared this view
to the next generation. Family run firms are also being compared to a global average of 68%.
pressured to uphold their sense of purpose and values
from an ever more discerning consumer base. The Family businesses have embraced digitalisation to a greater degree than their global peers
mainland China and Hong Kong findings of the Global
• More mainland family business owners are investing in digital capabilities than their global
Family Business Survey 2018 sheds light on these
counterparts (63% compared to 57%). Compared to their global peers, fewer decision makers on
themes and how they impact family businesses in these
the mainland and in Hong Kong also report feeling vulnerable to digital disruption (mainland: 12%,
economies.
Hong Kong: 27%, global average: 30%).

Family businesses find that the need to innovate in order to keep ahead is the key challenge that they
face

• 77% of mainland family businesses state that the need to innovate is a key challenge that they
face. Over half see the economic environment (58%) and the lack of professionalisation of the
business (52%) as issues.

Family businesses have a clear sense of values but lag behind global counterparts in terms of
governance structure

• 71% of mainland family businesses have a clear sense of agreed values and purpose as a
company compared to the global average of 79%. 94% of mainland respondents believe that a
clear sense of values and purpose have helped to create a competitive advantage (versus 75%
globally).

Global Family Business Survey 2018 – China Report 3

• However they lag behind their global counterparts in terms of conflict management and gender
representation, both of which contribute to economic performance and longevity. 13% of mainland
family business decision makers admit that they ignore conflict because of societal norms which is
slightly higher than the global average of 9%.

• Only 15% of board members are women in mainland family businesses (global average: 21%) and
15% of next generation family members working in the business are women (global average: 23%).
There is room for improvement to increase women’s representation in both these areas in order to
ensure the business is incorporating diverse perspectives and therefore run sustainably.

Family business owners are less inclined to plan for succession in spite of wanting to preserve
continuity

• 21% of mainland family businesses currently have a succession plan in place, compared to 35% in
2016. This indicates a 14% decrease in proportion of mainland family businesses who are inclined
towards succession planning. The proportion of mainland family businesses that stated they
have a succession plan this year is also lower compared to the Hong Kong (43%) and the global
averages (49%).

• 58% of mainland respondents have next generation family members working in the business,
compared to 71% in 2016. This indicates a 13 percentage point decrease compared to two years
ago. This year, fewer mainland respondents also reported having next generation family members
on their leadership team (35%), board of directors (29%) or senior management (33%) than the
global averages. Globally, 43% reported having next generation family members on the leadership
team, 37% on the board of directors and 36% in senior management.

• These downward trends suggest that family businesses are not adequately preparing to steer the
company after the founder has stepped down. However, in terms of long-term goals over the next
five years or longer, high proportion of family businesses on the mainland were more concerned
with environmental sustainability (75%) and protecting the business as the most important family
asset (62%). The data suggests a discrepancy between wanting to protect the business and failing
to ensure business continuity.

• Fewer mainland and Hong Kong family business leaders cared about creating a legacy than their
global counterparts (mainland: 25%, Hong Kong: 30%, global average: 60%). This is likely due to
the fact that a higher proportion of family businesses on the mainland and in Hong Kong are first
generation owned, compared to the global average, therefore less inclined to think about legacy
(see Figure 20).

Global Family Business Survey 2018 – China Report 4

The implications of the findings for different stakeholders, such as family businesses, banks, governments/regulators, are as follows:
For family businesses:
• There is opportunity for family business
owners that emphasise sustainability
to invest their wealth consistent with
their values by using environmental,
social and governance (ESG) criteria
for portfolio selection and investment
analysis. However, in order to shift
capital to socially beneficial activities,
family businesses being asset owners
need to familiarise themselves with
existing frameworks for responsible
investment.
• M
ainland China is the fastest growing
market for sustainable investing due
to China’s growing interest in green
finance and its policy commitments
to curtail carbon emissions by 2030.
According to a biennial survey by the
Global Sustainable Investment Alliance,
sustainable investments in mainland
China grew six-fold to US $2.9 billion
from 2014 to 2016, primarily related to
clean energy.1 Family businesses being
investors could ask themselves which
other SDG problems they could be
interested in solving through investment
and whether they would be happier with
a lower return as a trade-off for higher
impact.
Global Family Business Survey 2018 – China Report
• From a risk management perspective,
family businesses could consider
exploring family governance
mechanisms such as family constitution,
family council and family committees,
particularly in the area of conflict
resolution.
• There is opportunity for family
businesses to develop a succession
plan that focuses on wealth preservation
including setting up a trust fund or
family office in addition to last will and
estate planning. This is key to ensure
their businesses survive and to build a
lasting legacy.
5
For banks and advisory firms:
• Institutions could prioritise offering indices and products suited to
sustainable investing such as ESG-screened bonds, green bonds
and sustainability screened equities and related ETFs, to name a few
examples. Focusing on developing the complexity of products that
are currently on offer and providing guidance around sustainable
investing to meet the needs of their values-driven clients could be a
start.
• Driven by the values-driven demand of Chinese asset owners,
sustainable investing and impact investing is moving into the
mainstream and there is significant market opportunity to be
tapped by asset and wealth managers operating in China. There is
a knowledge gap on what sustainable investing entails, as well as
the return and impact it can deliver. Are the asset managers aware,
For governments/regulators:
• There is an opportunity for regulators to develop policies that support
sustainable investing initiatives. It is heartening to see that the China
Securities and Regulatory Commission aims to make it mandatory
for all listed firms to disclose environmental impact information
by the end of 2020, although there is still a lack of emphasis on
social and governance aspects.3 It is also encouraging to see that
the Securities and Futures Commission announced its strategic
framework to contribute to the development of green finance in Hong
Kong in late September.4
i. According to Thomson Reuters, China leads the rest of Asia in terms of the size of the
wealth management market, information technology and FinTech growth capabilities.5
Instead Hong Kong is seen to have a more complex regulatory regime which needs to
become simpler, clearer and more transparent in order to attract new FinTech players.6
which of the asset owners wouldn’t mind a lower return on their
investments? If this gap can be bridged, this would help to further
grow investor interest to increase allocations towards sustainable
investing.
• Institutions could offer digitally innovative solutions to meet the
needs of their digitally savvy customers particularly next generation
digital natives. For example, a 2017 PwC report highlighted that a
lack of digitally-enabled solutions has been cited by 36% of Hong
Kong private wealth managers as one of the top 3 complaints
they receive from clients.2 Therefore from a wealth management
perspective, robo-advisers and FinTech solutions could be offered
to meet family business expectations.
• Wealth management is one of the most heavily regulated financial
services sectors with clients having to comply with the tax
jurisdiction in which they are based as well as with cross-border
regulations. However, the government would need to reflect on what
kind of regulatory and legal context would need to be promoted to
encourage development of ESG driven investment vehiclesi
Global Family Business Survey 2018 – China Report 6
Family businesses have a significant market presence in terms of
job creation, contribution to the GDP and societal impacts. It is
encouraging to see that family businesses are values driven with an eye
to sustainability and longevity of their portfolios. China’s momentum in
impact and sustainable investments is moving into the mainstream and
should be able to accommodate the market’s demands as there is high
level policy commitment on cutting down carbon emissions. As part
of the ‘war on pollution’, China’s policy makers have articulated new
energy and environmental policies supporting renewables and stopping
the construction of coal fired power stations between 2016 and 2020.7

While influence of culture and values is strong in China, it can also

make family businesses averse to conflict management. Managing
differences is key to ensuring stability and longevity of the family
business and is in most cases a proxy for quality of governance. Data
also suggests inconsistency in that while family businesses want to
ensure longevity, succession planning continues to be weak. Family
businesses are experiencing strong growth in China and there is plenty
of market opportunity for service providers in China to help them
navigate their challenges and priorities. We encourage you to read the
main report for insights on family businesses in China.

Global Family Business Survey 2018 – China Report 7

Introduction

In mainland China, a large number of private family enterprises were

formed after the economic reforms in 1978. Since then, China has issued
a series of policy measures to encourage and support the development
of the private sector and the number of entrepreneurs have grown rapidly
to 27 million as at the end of 2017, of which family businesses form the
majority.8 The number of family businesses as a proportion of all private
enterprises listed on the A-share market shows an increase from 48.9%
in 2016 to 55.7% in 2017. As of April 2017, 1,112 family businesses are
listed on the domestic stock market.9 In recent months, the government
has also publicly encouraged the growth and innovation of privately-
owned enterprises and SMEs. In addition to solving the problem of
quasi-entry and financing, it will also introduce a higher-level and more
effective tax reduction and fee reduction policy.10 For example, the Ministry
of Finance will set aside a fund of 3 billion yuan each year from 2018
to 2020 to implement the reduction of corporate financing guarantee
fees for SMEs through a combination of subsidies and incentives.11 The
Guangdong provincial government also issued a notice offering certain
financial incentives for private enterprises successfully listed on the New
Third Board. Private enterprises that have successfully obtained direct
financing from the issuance of convertible bonds or shares at the regional
or provincial level will be granted certain financial subsidies.12 In Hong
Kong, the top 15 family businesses controlled assets worth 84% of GDP in
2015.13

Global Family Business Survey 2018 – China Report 8

Given the significance of family businesses in mainland China and Hong Kong, the PwC Global
Family Business Survey interviewed 108 family businesses in the two territories covered (52 in
mainland China and 56 in Hong Kong). Key decision makers were interviewed and the total sales
turnover of the HK sample was US $11 billion and for the mainland China sample was US $19.5
billion. Every two years PwC conducts the survey globally to explore the trends in family businesses.
The survey covers questions on the family business’s values and purpose, performance and
challenges, as well as preparations for the future. The 2018 Global Family Business Survey was
conducted between April and August and surveyed 2,953 family businesses each with a sales
turnover of above US $5 million across 53 countries.

For the purposes of this report, “China” refers to the People’s Republic of China, including Hong
Kong survey respondents. Where there is a statistically significant difference in the survey results
between Hong Kong and mainland China, results are presented separately.

In terms of sector distribution, manufacturing accounts for 25% of the sample in mainland China
compared to 29% of the sample in Hong Kong. In the mainland China sample, technology
(manufacturing) accounts for 29% of the sample and business activities account for 8%. In the Hong
Kong sample, wholesale accounts for 16% and retail accounts for 14%.

Family businesses are experiencing a period of unprecedented complexity marked by economic,

geopolitical and generational change. Companies are being evaluated by their emphasis on
sustainability, being “in it for the long run”, and enhancing their bottom line, and family run firms are
no exception. This is the China report which uncovers how family businesses on the mainland and in
Hong Kong are navigating and thriving in this unpredictable environment.

Global Family Business Survey 2018 – China Report 9

Chapter 1
Growth through higher sales

Global Family Business Survey 2018 – China Report 10

Family businesses report higher sales growth Figure 1: Sales growth of family businesses in the last financial year

More family businesses on the mainland have seen higher sales growth
over the past 12 months (75%) compared to the global average (69%). Double digit growth: 67% Double digit growth: 34%
Single digit growth: 8% Double digit growth: 25% Single digit growth: 35%
Out of this, 67% of mainland respondents saw double digit year-on-
Single digit growth: 30%
year growth in 2018, roughly double the global proportion of 34%.
While mainland growth was in line with what it was two years ago,
fewer firms this year reported a sales reduction as compared to 2016
(13% versus 27%). Conversely, Hong Kong family businesses are
seeing lower growth levels than their global peers (although the figure 75% 73% 69%
55% 64%
has improved compared to 2016). 55% reported growth in the past 12 38%
months (compared to 38% in 2016) and only 25% saw their business
sales exceed 10%. 13% 14% 9%
20%
27%
44%
There is evidence from the global sample that double digit growth is
correlated with having defined values. 84% of firms with double digit
growth in the past 12 months have a clear sense of agreed values Mainland China Hong Kong Global
which compares to 76% of firms that report sales growth of less than 2018 2016 2018 2016 2018 2016
10%. Sales growth Sales reduction

In aggregate, 26% of family businesses in China expressed “quick

and aggressive” growth aspirations over a two year time horizon,
compared to 16% of their global counterparts. On a dis-aggregated
basis, 31% of mainland respondents expect to grow “quickly and
aggressively” compared to 21% of Hong Kong respondents. In terms
of “steady growth” aspirations over a two year time frame, comparable
proportions of family businesses in HK and China (mainland: 52%,
Hong Kong: 50%) shared this view compared to a global average of
68%.

Global Family Business Survey 2018 – China Report 11

 Figure 2: Family business growth aims over the next two years
– Mainland China
4%

When asked about prospects over a 5 year time

horizon, 82% of family businesses surveyed on the 12%
mainland currently export their goods or services and 31%
92% expect to have international sales in five years.
Also, almost one in three mainland businesses (31%)
are diversified into multiple sectors and countries or 52%
regions this year, compared with 17% who claimed
this in 2016.

Globally, digitalisation and product diversification is Family business growth aims over the next two years
also correlated to double digit growth. 63% of global – Hong Kong
respondents that have double digit growth aim to
make significant steps in terms of digital capabilities 9%
(compared to 54% of those who have growth of less 21%
than 10%). 22% of global respondents with double 20%
digit growth are aiming to earn the majority of revenue
from new products or services (compared to 16% of
those with single digit growth). 50%

Family business growth aims over the next two years

– Global
2%

“
13% 16%

The expectations of family members

are to continue to operate, develop and
68%
expand this enterprise. Increase the

”
share in the market.
(Second generation, Hong Kong) Grow quickly and aggressively Grow steadily
Consolidate Shrink

Global Family Business Survey 2018 – China Report 12

Thinking about their business in two years’
time, 63% of mainland family business Figure 3: Expectations that are likely to be true of the family business in 2 years
leaders will have made significant steps in
terms of their digital capabilities, 58% will
have brought in experienced professionals Will have made significant steps 63%
in terms of digital capabilities 32%
from outside the company to help run it and 57%
48% will be selling their goods or services Will have brought in experienced professionals 58%
in new markets. These proportions compare 46%
from outside the family to help run it 53%
favourably to the Hong Kong and global
averages. 32% of Hong Kong respondents Will be selling its goods or 48%
services in new countries 29%
are investing in digitalisation (global average: 38%
57%), 46% in professionalisation (global 42%
Will have been involved in buying or
average: 53%), and 29% in geographic merging with other domestic companies
13%
24%
diversification (global average: 38%).
Around one quarter of respondents on the Will have been involved in buying or merging with 33%
14%
mainland will have significantly changed other companies outside of its domestic market 18%
their business model (25%) or will earn the
Will have significantly changed 25%
majority of revenues from new products or its business model
27%
20%
services (23%).
Will earn the majority of its revenues 23%
23%
from new products or services 18%

Mainland China Hong Kong Global

Global Family Business Survey 2018 – China Report 13

In terms of using internal versus external
resources to finance growth, higher proportion Figure 4: Current and planned sources of funding for family businesses
of mainland and Hong Kong family business
leaders relied on external resources whereas their Mainland China Hong Kong Global
global counterparts relied on internal resources Bank lending/
for financing growth. Survey results showed that credit lines 79% 19% 63% 20% 81% 10%

apart from relying on bank lending and credit lines,

mainland family businesses used capital markets
(69%), the stock market (63%) and venture capital Capital markets 69% 23% 25% 18% 15% 13%
or private equity (38%) to a much greater extent
than their global peers. Hong Kong decision
makers also took advantage of non-traditional Stock market 63% 23% 18% 11% 10%7%
funding methods to a greater degree particularly
accessing the capital markets through bonds or
debt issuance (25% versus 15% globally). On the Internal resources 56% 5% 54% 11% 71% 8%
other hand, lower proportions of family businesses
in China compared to their global counterparts
used internal resources for financing growth Venture capital/
38% 23% 16% 18% 16% 15%
(mainland: 56%, Hong Kong: 54%, global average: private equity
71%).

Looking at actions that they would consider to

Currently use Will start to use in the next 1 to 2 years
help fund the business, almost three-quarters
(73%) of mainland family businesses will
consider listing all or part of the business on a
stock exchange or placing shares with chosen
institutions. Hong Kong family business executives
were also more inclined to turn to equity financing
(45% compared to 26% globally) thanks to the
establishment of the Growth Enterprises Market
(GEM) and a more mature investor base. Over
two-fifths (44%) of businesses in mainland China
will consider bringing in private equity to help fund
the business (global average: 39%).

Global Family Business Survey 2018 – China Report 14

 Figure 5: Family businesses with a strategic plan for the next 3 to 5 years

Mainland China

Have a costed, Family businesses are active strategic planners

formalised and 77%
96% documented plan Brick-and-mortar businesses are being replaced with virtual
organisations and changing consumer habits has meant that
Have a strategic Have a plan but what worked in the past may no longer suffice. Against the
plan in place it is not costed,
formalised and 19% backdrop of an ever-evolving playing field, the global data shows
that having a mid-term strategic plan also correlates to double-
documented
digit sales growth. 55% of firms with double digit growth in
the last year have a fully costed, formalised and documented
Hong Kong strategic plan which compares to 46% of firms that report sales
growth of less than 10%.
Have a costed,
formalised and 41% Close to all mainland family business executives have a strategic

68%
documented plan
plan for the next three to five years (96% compared to 79%
Have a plan but
globally). The proportion that have fully costed, formalised and
documented strategic plan also compares favourably with the
Have a strategic
plan in place
it is not costed,
formalised and 27% global average (77% compared to 49%). In contrast, Hong Kong
documented family businesses appear to be less prepared. Almost one-third
of them have no strategic plan at all, higher than the global
average (32% compared to 21%).
Global

Have a costed,
formalised and 49%
79%
documented plan

Have a plan but

Have a strategic
plan in place
it is not costed,
formalised and 30%
documented

Global Family Business Survey 2018 – China Report 15

 Among those with any sort of plan, 90% of mainland family business leaders say the plan is embedded in their
financial planning process (Hong Kong: 63%, global average: 83%), and 70% say the plan has defined financial
and non-financial KPIs in place to measure its success (Hong Kong: 39%, global average: 65%). 98% have
communicated the plan internally (Hong Kong: 61%, global average: 82%) and 78% externally (Hong Kong:
45%, global average: 53%). Hong Kong firms appear to be lagging behind the mainland and global averages
for these indicators.

In terms of short-term aspirations, executives on the mainland found that attracting and retaining talent (92%),
being more innovative (85%) and offering a compelling reward system for employees (83%) were the most
important objectives to pursue in the next two years. Hong Kong decision makers were also concerned with
talent management (80%) and innovation (73%), yet on top of this, improving profitability was a key goal
for 79% of respondents. These top three goals, talent management, innovation and profitability, match the
priorities of their global peers. However, fewer Hong Kong respondents viewed contributing to the community,
leaving a positive legacy as well as achieving a work-life balance as important goals. Merely 36% prioritised
contributing to the community and leaving a positive legacy (mainland: 44%, global average: 60%) and 34%
prioritised achieving a work-life balance (mainland: 69%, global average: 58%).

Figure 6: Important personal and business goals for family businesses over the next 2 years

To attract and retain the best talent for the business 92%
80%
87%

To be more innovative 85%

73%
73%

To offer a compelling reward system for employees 83%

“
64%
62%
I would like my lasting legacy to To professionalise the business 81%
64%
be a basic principle of company 64%

management: appointing people To improve profitability 79%

79%
on their merit and ability. It does 80%

not matter whether they are your To achieve a work-life balance 69%

”
34%
relatives or your rivals. 44%
58%

To contribute to the community and leave a positive legacy

36%
(First generation, Mainland China) 60%

Mainland China Hong Kong Global

Global Family Business Survey 2018 – China Report 16

Chapter 2
Challenges faced by family
businesses

Global Family Business Survey 2018 – China Report 17

The pressing need to innovate

Mainland family business leaders cite the need to innovate in order

to keep ahead as the key challenge that they face (77%). This
worry exceeds their other perceived challenges by a significant
margin. Over half see the economic environment (58%) and the
lack of professionalisation of the business (52%) as issues. Hong
Kong family businesses on the other hand view the economic
environment as the biggest challenge to their business (64%).
They are also concerned with domestic competition (55%) and
the need to innovate (55%). A higher proportion of Hong Kong
family businesses, than their mainland counterparts, worry about
succession (30% compared to 12%) and conflict between family
members (18% compared to 4%). A higher proportion of mainland
businesses compared to Hong Kong businesses worry about data
management (50% compared to 25%).

Figure 7: Key challenges for family businesses over the next 2 years

The need to innovate to keep ahead 77%

55%
66%

Economic environment 58%

64%
56%

Professionalisation of the business 52%

43%
41%

Data management 50%

25%
39%

Domestic competition 48%

55%
49%

Mainland China Hong Kong Global

Global Family Business Survey 2018 – China Report 18

 Family businesses on the mainland and Hong Kong tend to feel less vulnerable to digital disruption or a
cyber-attack than their global peers perhaps as they have already embraced “going digital” to a greater
degree. The digital economy was equal to 30.3% of mainland China’s GDP or 22.6 trillion yuan (US
$3.35 trillion) in 2017 and is expanding rapidly. It includes the Internet of Things, financial technology,
artificial intelligence, advanced robotics and big data.14

Only 12% of mainland and 27% of Hong Kong executives feel “very vulnerable” or “fairly vulnerable”
to digital disruption (compared to 19% and 33% in 2016 respectively). The global average of this
statistic has instead risen from 24% in 2016 to 30% in 2018. The proportion of family businesses on the
mainland that feel very or fairly vulnerable to a cyber-attack in 2018 amounts to 15% of the respondent
sample whereas in Hong Kong it is 23% and the global figure is 40%.

When asked to elaborate on the threat from digital disruption, respondents are more likely to see it
as a challenge to their existing business model and the need to keep up or stay ahead by having the
right skill sets, leadership skills and investment. Family business executives on the mainland and in
Hong Kong are worried about the emerging threat of competitors. These could take the shape of large
multinationals challenging the way family businesses sell their products and disrupting the supply chain,
or it could be new entrants that have the skills and funding to disrupt the market and have a digital focus
from the outset.

“
Survey respondents in the global as well as in the China sample made reference to specific technologies
“We are vulnerable to the disruption that posed a competitive threat or impact on jobs. The consensus view was that artificial intelligence
caused by artificial intelligence presented the biggest threat (based on the number of mentions). There were fewer mentions of
Blockchain, big data, machine learning, 3D Printing and driverless cars for example. Some however
and new business models. AI may saw these threats as opportunities or had a lack of understanding of the threat, interpreting it more as a
affect the direction of our product security risk. There were mentions on significant fears over cyber security, vulnerability to cyber-crime,
development. New business models reputational threats from social media, banking fraud or systems outages.
may be based on the Internet of
Things. Traditional manufacturing
is based on two ends: the
manufacturer and the client. We

”
will become a link in the middle.
(First generation, Mainland China)

Global Family Business Survey 2018 – China Report 19

Conflict management is still taboo 23% of mainland and 29% of Hong Kong businesses state that
family conflict has not occurred compared to the global average
In spite of their best intentions, family members’ strategic directions may not of 17%. Perhaps part of this is due to the fact that they are less
always align. Conflict management is therefore an important aspect of ensuring likely to admit there is conflict in the family than their global peers
productivity and business continuity. due to traditional Confucian values that emphasise family unity.
Many mainland family businesses tend to hide conflicts that occur
among family members due to the strong desire to “save face” or
Figure 8: Approaches used to handle family conflict uphold their reputation.15 In fact 13% of family business decision
makers on the mainland and 14% in Hong Kong admit that they
Conflict is handled within the immediate family
60% ignore conflict because of societal norms (global average: 9%).
52%
63%
50% For those Hong Kong businesses that do manage family
Conflict is discussed openly by the family 52% conflict, 52% claim that it is handled within the immediate family
54%
17% (compared with global average of 63%) and 52% stated conflict is
Use a third-party conflict resolution service 11% discussed openly by the family (compared to the global average
14%
13%
of 54%). On the mainland, 60% reported handling conflict within
Ignore conflict because of societal norms 14% the immediate family and half discuss it openly. 17% of mainland
9%
family firms use a third-party conflict resolution service compared
4%
Other approaches to the global average of 14%.
7%
23% According to a report by the World Economic Forum, conflict
Not applicable / No conflict has occurred 29%
17% management is a key component of the governance practices of a
family business. The same report indicates that family tension has
a strong negative impact on performance, while the use of family
Mainland China Hong Kong Global governance practices enhances the firm’s financial success.16 In
order to mitigate family conflict and promote unity, it is necessary
for businesses to put in place a formal family governance plan.

“
Incorporating structures such as a family constitution, family
council and family committee for example, can go a long way to
Because the amount of wealth involved in a family help to advance family harmony as well as business prosperity.
business is relatively large, using the enterprise
family values determines many factors, including
the business development and direction of the
enterprise. Therefore, the values of the family
must be clear. If it is not clear, it will be difficult
when you encounter conflicts.

”
(First generation, Mainland China)
Global Family Business Survey 2018 – China Report 20
Diversity through female representation is lagging

In the past, mainland and Hong Kong family businesses usually gave preference to the
first-born son in the family when handing over the business. However, attitudes are
changing and more women are now being given equal rights to business ownership
as compared to their male counterparts.17 That being said, the 2018 survey findings
show there is still some way to go to achieve gender equality.

Mainland respondents reported a lower proportion of board

Figure 9: Presence of women in the business
Average proportion of female members
on the management team
Average proportion of female members
on the board
Average proportion of female next generation
members working in the business
members that are women (15%) than the global average (21%).
Additionally only 15% of the next generation family members
working in the business on the mainland are women (global
26%
25% average: 23%). Hong Kong family businesses were in line with
24% their global peers in terms of the current levels of female senior
15%
20% management. On average 20% of board members (global
21% average: 21%) and 25% of management are women (global
15% average: 24%). However, only 9% of next generation family
9%
23% members in Hong Kong family businesses are female (compared
to the global average of 23%).

Female talent and leadership is critical for businesses. According

Mainland China Hong Kong Global
to a 2018 PwC report, the skills and experience women bring are
essential in strategic decision-making and in building an ethical,
sustainable enterprise.18 In a 2015 MSCI study, the return on
equity was 2.7% higher for companies on the MSCI World Index
that had strong female leadership and these companies were also
less prone to governance-related controversies.19

Global Family Business Survey 2018 – China Report 21

Chapter 3
Family and corporate values
enhance reputation and
sustainability

Global Family Business Survey 2018 – China Report 22

Values and purpose help family businesses navigate the Figure 10: Views of family business executives on values and purpose
challenges posed by the economic environment and digital
disruption. Family businesses, like all corporations, are
also under increasing scrutiny to promote sound corporate You are committed to and adhere to 87%
52%
governance and ensure long-term sustainability. Survey corporate social responsibility
77%
results found that 71% of mainland family businesses have 73%
a clear sense of agreed values and purpose as a company You have a defined code of conduct 52%
compared to the global average of 79%. 87% of mainland 66%
family businesses are committed to corporate social You have a documented vision and purpose 73%
statement (mission) for your company 36%
responsibility (CSR) which is higher than the global average 68%
of 77% and 73% have a defined code of conduct which
You have a clear sense of agreed values 71%
compares favourably with the global average of 66%. 55%
and purpose as a company
79%
When asked which key words represented their family values, You have the family values and mission for 48%
mainland and Hong Kong family businesses, like their global the company articulated in written form 25%
peers, gave varying answers such as: community, ethics, 49%
sustainability, innovation, quality, customers and trust.
Companies that have written down their family values and Mainland China Hong Kong Global
mission give richer and more detailed answers. They were
able to better articulate their values thus providing evidence
that the rigour of committing values to paper is a meaningful
process. Firms that have strong family and corporate values are more likely to run their
business based on the principles of long-term stewardship and sustainability.
From the global sample, results suggest that family businesses that display
double digit growth are more likely to have defined values (see Chapter 1).

Those mainland family businesses with a clear sense of agreed values feel
strongly that these benefit the company in a variety of ways, notably in terms of
business reputation and increased sustainability (100% and 97% respectively).
In mainland China the results suggest that values and purpose have helped to
create a competitive advantage (94% versus 75% globally) and have impacted
the bottom line in increased revenue and profitability (85% versus 70% globally).

Global Family Business Survey 2018 – China Report 23

 In the Hong Kong context, family business decision makers that have
defined their values and purpose state these have had a positive
impact on staff retention, business reputation, sustainability and
creating a competitive advantage. This implies that family businesses
that can live up to their values and purpose can make better decisions
for the firm and mitigate against risk.
On the other hand, family and corporate values are inextricably linked
to a family business’s brand as these have a “visible” impact on the
company’s ability to communicate with and service its customers. In
fact, the importance of brands to reinforce company values and support
quality economic growth has been underscored by recent government-
led measures, including the establishment of the “China Brand Day”
by the State Council, and CCTV’s “China Brand Project” promoting
domestic brands with strong missions and social responsibility”20

Figure 11: Views of family business executives on the impact of values and purpose on the business

Improved your company’s reputation 100%

in the market with customers 84%
87%
Increased sustainability 97%
84%
78%
Created a competitive advantage 94%
84%
75%
Increased brand awareness 94%
81%
73%
91%
Improved your company’s staff retention 90%
82%
Increased your company’s revenue and profitability 85%
77%
70%

“ Family values are similar to our company's Mainland China Hong Kong Global

values, that is, integrity and synergy, from

a company perspective, this creates greater

”
value for the company.
(First generation, Mainland China)

Global Family Business Survey 2018 – China Report 24

Chapter 4
Preparation to ensure legacy and
business continuity

Global Family Business Survey 2018 – China Report 25

 Practising philanthropy is a great way for family
businesses to demonstrate and reinforce their company Figure 12: Family business engagement in philanthropic activities
values and preserve legacy, while succession planning
to pass on company leadership and management is
Giving money to good causes 77%
key to business continuity. and your local community 70%
81%
Greater scope for philanthropy Providing voluntary services 69%
to your local community 45%
49%
By engaging with the wider community, the family-run Engaging employees in decision 62%
firm shows their stakeholders that they are cognisant making about community service 50%
41%
of the world in which they function. On the mainland,
25%
charitable giving by family businesses is still at a You have a family foundation
23%
nascent stage.ii This might be due to the fact that the 22%
wealth is relatively new and family foundations have You have a joint foundation with other families 21%
5%
yet to be established to the degree that they have been 6%
in the West.21 Additionally the governance of charities Running a ‘salary sacrifice’ 15%
donation scheme for employees 20%
is weak and trust is low. However as mainland family 12%
businesses mature there is great scope for them to get
involved in philanthropy in the future.iii
Mainland China Hong Kong Global
Among mainland and Hong Kong family businesses,
a high proportion are engaged in some form of
philanthropic activity and for most, this has a good
cause or community focus (mainland: 77%, Hong
Kong: 70%). When asked about engagement Family businesses that are engaged in philanthropy use a variety of methods to ensure these
through other types of philanthropic activities, most activities happen including embedding it in the firm’s strategy (mainland: 50%, Hong Kong: 40%),
popular was providing voluntary services to the local incorporating it in corporate governance rules and articles of association (mainland: 50%, Hong
community (mainland: 69%, Hong Kong: 45%) followed Kong: 17%) or family governance (mainland: 25%, Hong Kong: 28%). Yet, businesses on the
by engaging employees in decision making about mainland hold themselves more accountable for their philanthropic actions. Close to seven in ten
community service (mainland: 62%, Hong Kong: 50%). mainland businesses (68%) try to measure the impact of their philanthropy (much higher than the
26% in Hong Kong and 29% that claim to do this globally).

ii. According to a report by the United Nations Development Programme titled 'Unleashing the potential of philanthropy in

“
Being profitable and sustainable in
business while helping others in the
China', philanthropy only contributed 0.17% to China’s GDP in 2014 whereas in the US it contributed 12%.
iii. According to the same report, as at the end of 2015, there were over 4,211 foundations in China, a 60 percent increase
from just five years ago. The majority of these are corporate or family foundations associated with a company.

”
society.
(Third generation, Hong Kong)
Global Family Business Survey 2018 – China Report 26
Fewer next generation family members are working in the business
Apart from the members involved in the day-to-day running of the
business, it is critical to consider the wider family unit. In particular, to
what extent is the next generation involved in the business and how
much do they have a say in the way it is run?
Fewer mainland family businesses have next generation family
members working in the business than two years ago (58% compared
to 71% in 2016). This year, fewer mainland respondents also reported
having next generation family members on their leadership team
(35%), board of directors (29%) or senior management (33%) than
the global averages. Globally, 43% reported having next generation
family members on the leadership team, 37% on the board of directors
and 36% in senior management.iv Comparatively, more Hong Kong
family businesses have next generation family members working in the
business than in 2016 (57% compared to 44% two years ago).
iv. The likely reason for this is majority of the overall global sample of family businesses
surveyed are more established companies (in their second generation or greater). The
older the business is, the greater the number of generations that have been brought up
in the business and therefore know how to run it.
These discouraging statistics are supported by recent research from
the Tanoto Center for Asian Family Business and Entrepreneurship
Studies at the Hong Kong University of Science and Technology that
finds that 80% of second generation heirs on the mainland have no
desire to join their family business.22 Part of the reason why stems from
the fact that they have been educated overseas and have adopted new
career ideas. The low value added businesses they stand to inherit
are viewed as less sophisticated than other ventures they could be
undertaking in industries like banking, investment and technology.
In spite of this, more mainland next generation family members are
engaged in a family office than their Hong Kong or global counterparts
(mainland: 21%, Hong Kong: 5%, global average: 15%) or in
philanthropic activities (mainland: 40%, Hong Kong: 14%, global
average: 24%). Perhaps the next generation are more willing to take on
these ancillary functions rather than critical parts of the business. Or
it could be that first generation owners are more willing to hand over
these secondary areas to their next of kin while retaining control of their
primary operations.
It is important for family businesses to involve the next generation in the
business not only to ensure succession but also as a means to tackle
digital disruption. Millennials are well-educated digital natives that have
a wealth of skills to offer in order to drive innovation and out-of-the-
box thinking. By setting up a development program for next generation
family members, business owners can empower them either to set up
their own venture within the business or take the existing business to
the next level.
Global Family Business Survey 2018 – China Report 27
 Figure 13: Involvement of the next generation in the family business
On the leadership team
Senior executives
On the board of directors
Working in the business but not in a senior role
Not working in the business
but who are shareholders
Engaged in family office
Engaged in philanthropic activities
Mainland China
“
Families are the compass that guides us. They are the
inspiration to reach great heights, and our comfort
when we occasionally falter.
(First generation, Mainland China)
More next generation family members on the mainland are expected to
graduate from business school than their global counterparts (mainland:
35% 70%, global average: 59%) and to have specific foreign language skills
38%
43% (mainland: 70%, global average: 50%). More next generation family
33% members in Hong Kong on the other hand are expected to gain experience
34%
36% outside the family business than their global peers (Hong Kong: 75%,
29% global average: 69%). Fewer mainland and Hong Kong respondents expect
27%
37% next generation family members to gain experience from inside the family
29% business than the global average (mainland: 67%, Hong Kong: 69%, global
21%
31% average: 76%) or fulfil the official job specification of the role they assume
10%
7% (mainland: 53%, Hong Kong: 59%, global average: 65%). This suggests
29% a level of nepotism still prevails in this part of the world possibly hindering
21% the professionalisation of family businesses (earlier mentioned as a key
5%
15% challenge in Chapter 2).
40%
14%
24%
Hong Kong Global Family businesses are less inclined to plan for succession
Perhaps the most important part of ensuring a lasting legacy is for family
businesses to plan the succession process. However, mainland family
businesses display a strong cultural resistance to discussing planning for
death and succession.23 When it comes to handing over the reins fewer
mainland respondents currently have a succession plan in place than those
that did in 2016 (21% compared to 35%). The proportion of mainland
family businesses that stated they have a succession plan this year also
compares negatively to Hong Kong executives (43%) and the global average
(49%). This may be explained by the observation that a higher proportion
(75%) of mainland businesses surveyed are owned by first generation
family members, compared to 55% in Hong Kong, thus are more averse to
preparing for succession.
”
Global Family Business Survey 2018 – China Report 28
 Figure 14: Family businesses with a succession plan

This year only 10% of mainland and 11% of Hong Mainland China
Kong family businesses have a robust, formalised and
communicated succession plan in place (global average: Have robust,
formalised and 10%
21%
15%). Among those with no succession plan, 26%
communicated plan
of respondents on the mainland plan to develop one
compared to 38% of Hong Kong family businesses.
Have a succession
The need for a formal succession plan in order to enable
an orderly succession in ownership, management and
plan in place Have a plan
but less formal 11%
control cannot be overstated. Succession planning
ensures the survival, ownership, and growth of the
Hong Kong
business among other advantages.
Have robust,
formalised and 11%
43%
communicated plan

Have a succession
plan in place
Have a plan
but less formal 32%

Global

Have robust,
formalised and 15%
49%
communicated plan

Have a plan
Have a succession
plan in place
but less formal
34%

Global Family Business Survey 2018 – China Report 29

When asked if they plan to pass on company leadership
and management, ownership, or both, to a next Figure 15: Plans to pass on the management and/or
generation family member, mainland and Hong Kong ownership of the family business to the next generation
family business decision makers were less enthusiastic
than their global counterparts. 42% of mainland Mainland China Hong Kong Global
respondents and 45% of Hong Kong respondents
stated they would be willing (global average: 57%). In Yes, both
26% Yes, both Yes, both
2016, 62% of mainland respondents and 69% of Hong Don’t know
Don’t know 30% Don’t know 37%
5%
Kong respondents were willing to pass on company 12% 11%
management, ownership or both, to a next generation Yes
Yes
family member (global average: 73%). 42%
45% No
Yes
57%
No 32%
The emotional attachment that first generation owners No
46%
Yes, 50%
management only
have to the businesses they have created may form part 8%
Yes,
of the reason they are unwilling to let go. Another reason management only
Yes,
could be the lack of interest from the next generation ownership only
13%
Yes,
themselves. As mentioned earlier, mainland heirs are likely 8% Yes,
Yes,
management only
ownership only 9%
to have been educated overseas and come back opting 2%
ownership only
11%
for alternative careers in other industries. It also may be
due to the fact that there are fewer next generation family
members working in these businesses in the first place,
therefore there is a smaller pool to choose from. In spite
of this, when looking at those respondents who already
have the next generation working in the business, the
proportion of respondents willing to pass on company
management, ownership or both, to a next generation
family member, rises to 53% on the mainland and 69% in
Hong Kong this year (global average: 68%).
For mainland family businesses that hope to pass on company leadership and management,
company ownership, or both to the next generation, 33% plan to do so in the next ten years or
later. The most popular timeframe for Hong Kong businesses on the other hand is within six to ten

“
For the next generation, I want them to have
freedom. I don't mind whether they want to
succeed in the family business or not. I want
years (40% chose this option). Surprisingly, 29% of business leaders on the mainland reported
that next generation family members were not even aware of these preparations (on par with the
global average of 30%). Hong Kong family businesses were even less open in terms of disclosing
their succession plans than their mainland counterparts. 36% stated they had not involved the next
generation in the succession planning process.

”
them to have their own way of life.
(First generation, Mainland China)

Global Family Business Survey 2018 – China Report 30

Protecting the business as the most important family asset is key

Research by the Chinese University of Hong Kong finds that Figure 16: Long term goals of family businesses over the next 5 years or longer
Asian family firms lose 60% of their value when the power is
first transferred.24 From passing down business knowledge 75%
To become environmentally sustainable 38%
to future generations, to making a permanent impact on 60%
the community and society at large, it is crucial for family To protect the business as 62%
businesses to build a legacy that lasts long after the current 57%
the most important family asset 76%
leadership has stepped down. 50%
To create employment for the wider community 38%
59%
In terms of long-term goals over the next five years or
44%
longer, businesses on the mainland were more concerned To ensure the business stays in the family 55%
61%
with environmental sustainability (75%) and protecting the
business as the most important family asset (62%). In Hong 33%
To create dividends for family members 46%
57%
Kong, like their global peers, the top two concerns were
protecting the business as the most important asset (57% 25%
To create a legacy 30%
compared to 76% globally) and ensuring that the business 60%
stays within the family (55% compared to 61% globally). 8%
To create employment for other family members 16%
Fewer mainland and Hong Kong family business leaders 20%
cared about creating a legacy than their global counterparts Mainland China Hong Kong Global
(mainland: 25%, Hong Kong: 30%, global average: 60%).
This is likely due to the fact that a higher proportion of family
businesses on the mainland and in Hong Kong are first
generation owned compared to the global average therefore
less inclined to think about legacy (see Figure 20).
Yet for those mainland and Hong Kong family businesses who did care, when they
were asked what they wanted their lasting legacy to be they emphasised continuity and
endurance. Like their global peers, they have hopes that the physical business, family
involvement, growth and success of products and services, and the support given to
communities will last long beyond their lifetimes. Many family businesses defined success
not just in terms of financial wealth but in less tangible elements of personal growth or

“
I would like to create a business that is sustainable
in itself and be respected by customers and
competitors while creating a stable yet challenging
environment for employees to grow and advance
in their career and to create a stable income
stream for the extended family.
(First generation, Hong Kong)
” Global Family Business Survey 2018 – China Report
development, community or employee support and the upholding of core values.
As mentioned earlier in the chapter, in order to ensure the continuity of family businesses
on the mainland and in Hong Kong it is necessary for business owners to emphasise
succession planning and set up a development plan for next generation family members.
There is also opportunity for the use of a family office to promote financial management and
controls in order to maintain and grow family wealth for current and future generations.
31
 Conclusion
Family and corporate values enhance reputation and sustainability.
More mainland Chinese family businesses have a clear sense of
company values than their Hong Kong peers. More have also achieved
higher growth levels than their Hong Kong counterparts. These firms
are still relatively young and many plan to grow quickly and aggressively
in the next few years.
Privately-owned businesses are also currently being supported by
favourable government policies. In September 2017, the Communist
Party of China Central Committee and the State Council jointly
released a guideline encouraging entrepreneurship in a move to drive
market confidence. Mainland China’s 19th Party Congress report from
October of last year also called for “supporting the growth of private
businesses” and getting rid of regulations and practices that hamper
the development of a unified market and fair competition.25
“ The company owner regards the company
as his child and has brought it up. He has
a strong sense of responsibility for the
company and would like his lasting legacy
”
to be a well-developed company.
(First generation, mainland China)
In the longer term however, fewer mainland family business owners
are inclined to plan for succession compared to two years ago. What’s
more, fewer next generation family members are taking up roles in the
family business than in 2016. With more than 3 million entrepreneurs
reaching the age of retirement in the next decade26, their businesses will
no doubt face succession challenges. These challenges will be further
exacerbated against a backdrop of digital disruption and a shortage of
available talent.
There is an old Chinese proverb that states that “wealth does not pass
beyond three generations”. Whether or not mainland and Hong Kong
family businesses get handed over to next generation family members,
owners are likely to look to external sources for professional advice
and expertise in family governance and wealth management and
preservation.
We offer three key recommendations for mainland and Hong Kong
family businesses to thrive in the 21st century:
• Define and activate your company values, innovate and invest in
digital capabilities and diversify your operations.
• Preserve your wealth through sustainable investing to protect and
enhance portfolio returns over the longer term.
• Seek advice on family governance and succession planning and
build a robust, formalised and communicated succession plan.
Global Family Business Survey 2018 – China Report 32
Methodology and
sample composition

Global Family Business Survey 2018 – China Report 33

For the purposes of this survey, a ‘family business’ is Figure 19: Distribution of samples
defined as a business where: Figure 18: Distribution of Mainland China sample by sector by family ownership structure
Technology (manufacturing) 29%
1. The majority of votes are held by the person who
8% 2% 6%
established or acquired the firm (or their spouses, Manufacturing 25%
4%
7%
2% 8%
2%
parents, child, or child’s direct heirs); Business activities 8% 12% 6%
27%
2. At least one representative of the family is involved in Retail 6% 17% 28%
the management or administration of the firm; 4%
Education & health 6% 4%
3. In the case of a listed company, the person who
Food & drink (manufacturing) 4%
established or acquired the firm (or their families) 59%
58% 46%
possess 25% of the right to vote through their share Media & entertainment 4%
capital and there is at least one family member on the Automotive and repairs 4%
board of the company.
Mainland China Hong Kong Global

Distribution of Hong Kong sample by sector

One dominant owner Spouse and/or in-law Siblings
Figure 17: Distribution of samples by sales turnover (US$) Manufacturing 29%
Several cousins Extended family (30+) Other
Wholesale 16%
5% 6% Retail 14%
2%
21% 5%
Real estate and renting 11%
6% 24% Figure 20: Distribution of samples by number of
36% Financial services 5%
generations owning or running the business today
Transport 4%
29% 17%
4% Business activities 4% 2%
14% 4% 10%
Technology (manufacturing) 4% 21%
15% 19%
16%
16% 34%
17% 13%
6% 18% 12% 37%
2% Distribution of Global sample by sector
Mainland China Hong Kong Global 75%
Manufacturing 22% 55%
Wholesale 11% 35%
$10m and under $11-20m $21-50m $51-100m 8%
Food and drink (manufacturing)
$101-500m $501m-$1bn $1bn+ Construction 7% Mainland China Hong Kong Global
Retail 7%
5% 1 generation 2 generations
Agriculture
Transport 4% 3 generations 4+ generations

Technology (manufacturing) 4%

Global Family Business Survey 2018 – China Report 34

Contacts

Elton Huang Stephen Wong

PwC China & Hong Kong Entrepreneurial PwC China & Hong Kong Entrepreneurial
& Private Business Co-Leader & Private Business Co-Leader
+86 (21) 2323 3029 +86 (10) 6533 2255
elton.huang@cn.pwc.com stephen.h.wong@cn.pwc.com

John Wong Jean Sun

PwC China & Hong Kong Family Business PwC China Entrepreneurial & Private
& Private Client Services Leader Business North China Partner
+852 2289 1810 +86 (10) 6533 2693
john.cw.wong@hk.pwc.com jean.sun@cn.pwc.com

Global Family Business Survey 2018 – China Report 35

 Endnotes
1. Global sustainable investments grow 25% to $23 trillion, July 2017, https://www.bloomberg.com/professional/blog/ 17. Why more Chinese women are taking over the family firm or starting their own business, November 2017, https://www.
global-sustainable-investments-grow-25-23-trillion/ scmp.com/business/companies/article/2118477/why-more-chinese-women-are-taking-over-family-firm-or-starting
2. PWMA / PwC Hong Kong Private Wealth Management Report 2017, https://www.pwchk.com/en/asset-management/ 18. Time to talk: What has to change for women at work, March 2018, https://www.pwc.com/gx/en/about/diversity/iwd/
hong-kong-private-wealth-management-report.pdf international-womens-day-pwc-time-to-talk-report.pdf
3. Why China has yet to catch the wave of global responsible investing, February 2018, https://www.scmp.com/business/ 19. Women on boards - Global trends in gender diversity on corporate boards, MSCI, November 2015,　https://www.msci.
article/2134116/why-china-has-yet-catch-wave-global-responsible-investing com/documents/10199/04b6f646-d638-4878-9c61-4eb91748a82b
4. SFC announces green finance strategic framework, September 2018, https://www.sfc.hk/edistributionWeb/gateway/ 20. 国家品牌计划：聚焦中国品牌升级之路, May 2018, http://finance.jrj.com.cn/2018/05/07215024504046.shtml
EN/news-and-announcements/news/doc?refNo=18PR110
21. China's Philanthropy Gap, July 2016,　https://www.forbes.com/sites/ceibs/2016/07/26/chinas-philanthropy-
5. How is AI shaping wealth management in China?, August 2018, https://blogs.thomsonreuters.com/financial-risk/ gap/#599a04c12b56
wealth-management-private-banking/ai-wealth-management-china/
22. ‘Silver-spoon’ Chinese have no desire to run the family firm, September 2017,　http://www.atimes.com/article/silver-
6. Systemic drawbacks drag Hong Kong banks in digitalisation race, October 2017, https://asianbankingandfinance.net/ spoon-chinese-no-desire-run-family-firm/
retail-banking/exclusive/systemic-drawbacks-drag-hong-kong-banks-in-digitalisation-race
23. Succession planning presents a cultural challenge in China, March 2018, https://www.ft.com/content/ce3f521a-1559-
7. Is Paris possible? The Low Carbon Economy Index 2017, https://www.pwc.nl/nl/assets/documents/pwc-low-carbon- 11e8-9c33-02f893d608c2
economy-index-2017.pdf
24. Do Asian Family Businesses Destroy Themselves? November 2014,　http://www.cuhk.edu.hk/english/features/
8. “加强版”民企支持新政落地在即 着力提升中小企业获得感, October 2018, http://caijing.chinadaily.com.cn/2018- professor-joseph-fan.html
10/25/content_37134303.htm
25. China’s new leadership rolls out new blueprint for future development, Business Review of China’s 19th Party
9. 内地上市家族企业调研：第一波权力交接完成 80后是主力 90后崭露头角, October 2017, http://3g.forbeschina.com/ Congress, November 2017, https://www.pwccn.com/en/research-and-insights/publications/china-s-19th-party-
review/201710/0065891.shtml congress/business-review-of-china-s-19th-party-congress-cn.pdf
10. “加强版”民企支持新政落地在即 着力提升中小企业获得感, October 2018, http://caijing.chinadaily.com.cn/2018-10/25/ 26. Does China Face a Family-Owned Business Succession Crisis, Cheung Kong Graduate School of Business
content_37134303.htm Knowledge, May 2018, http://knowledge.ckgsb.edu.cn/2018/05/23/entrepreneurship/china-family-firms-face-business-
succession-crisis/
11. 我国将对小微企业融资担保业务实施降费奖补, October 2018, http://china.chinadaily.com.cn/2018-10/26/
content_37142214.htm
12. 地方政府出手增援民营企业 激发各类市场主体活力, October 2018, http://caijing.chinadaily.com.cn/2018-10/19/
content_37100417.htm
13. To have and to hold, The Economist, April 2015,　https://www.economist.com/special-report/2015/04/18/to-have-and-
to-hold?fsrc=scn/tw/te/pe/ed/tohaveandtohold
14. China's Digital Economy's Growth Will Soon See It Outpace The Traditional Economy, November 2017,　https://www.
forbes.com/sites/sarahsu/2017/11/24/chinas-digital-economy-will-become-the-economy/#1d760a5d430d
15. The Dragon Network: Inside Stories of the Most Successful Chinese Family Businesses, 2013, A.B. Susanto and
Patricia Susanto, Bloomberg Press
16. A Primer on Governance of the Family Enterprise, World Economic Forum, June 2013,　https://faculty.wharton.upenn.
edu/wp-content/uploads/2013/09/WEF_FPC_FamilyEnterpriseGovernance_Report_1.pdf

Global Family Business Survey 2018 – China Report 36

Acknowledgements

Editorial and Writing Project Management Design Team

Sanjukta Mukherjee Yositta Wong Stephen Chow

Monica Uttam Terrance Lui Kanon Wong

Zona Chu

Global Family Business Survey 2018 – China Report 37

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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