PwC Global NextGen Survey 2022 – China Report: 94% of 2nd Generation are Leading Family Businesses & 31% Have Family Office, 60% of Hong Kong Business
18th November 2022 – Hong Kong
PwC has released a report PwC Global NextGen Survey 2022 – China Report, providing key insights into China family businesses, family offices and the next generation leading the family businesses in China. 94% of Mainland China 2nd generation are currently leading the business, compared to 61% in Hong Kong & 51% globally. 31% of China business have a family office and 60% of Hong Kong business have a family office (Global: 42%). The top 5 Mainland China next generation education background are Business/Commerce (60%), Maths/Finance (25%), Science (13%), Arts (13%) and IT/Digital (6%). Mainland China next generation have strong networks with NextGen from other family businesses to support their career 56% vs 44% (Global) and males are more likely than females to be expected to run the family business 52% vs 39% (Global). China Mainland next generation are less involved in senior leadership role, board role, governance role, family council role, shareholder, beneficiary (vs Global) but China Mainland next generation are more entrepreneurial, both outside family business, setting up new venture, or leading project in family businesses (vs Global). The top 5 priorities in the next 2 years for Mainland China family businesses are Business growth (72%), New technologies (52%), New sectors or markets (46%), Talent management (44%) and Asset allocation & investments (41%). See key data & summary below | View Report here
“ 94% of Mainland China 2nd generation are currently leading the business, compared to 61% in Hong Kong & 51% globally.
” 31% of China business have a family office and 60% of Hong Kong business have a family office “
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PwC’s Global NextGen Survey 2022 is an international market survey among next- generation members in family businesses. The goal of the survey is to get an understanding of what NextGens are thinking on the key issues of the day, what role they are playing and what roles they think they should play. The survey was conducted online in collaboration with The Family Business Network (FBN). There were 1,036 interviews in 68 territories, between 8 October and 12 December 2021. The China report focuses on the perspectives of 81 NextGen respondents in China. For the purposes of this report, ‘China’ refers to the People’s Republic of China, including Hong Kong SAR survey respondents.
PwC Global NextGen Survey 2022 – China Report: The World of Billionaires
PwC Global NextGen Survey 2022 – China Report:
Key Findings:
- Mainland China 2nd generation are currently leading the business (94%), compared to Hong Kong (61%), Global (51%)
- Only 6% of Mainland China 3rd generation are leading the business, compared to Hong Kong (30%), Global (51%)
- 31% of China business have a family office (Global: 42%)
- 60% of Hong Kong business have a family office (Global: 42%)
- Top Priorities in the next 2 Years for Mainland China family businesses: Business growth (72%), New technologies (52%), New sectors or markets (46%), Talent management (44%), Asset allocation & investments (41%)
“ The top 5 Mainland China next generation education background are Business/Commerce (60%), Maths/Finance (25%), Science (13%), Arts (13%) and IT/Digital (6%) “
Mainland China Next Generation Insights, Network, Education, Learning
- Clear idea about my personal ambitions for a future role in the family business – 79% vs 74% (Global)
- Strong networks with NextGen from other family businesses to support me in my career – 56% vs 44% (Global)
- NextGen males are more likely than NextGen females to be expected to run our business – 52% vs 39% (Global)
- Mainland China Next Generation Find These Succession Issues Easy – Discover own strengths and passions, Business essentials (i.e. accounting, finance, operations), Family Business / Office
- Top 5 Mainland China Next Generation education background: Business/Commerce (60%), Maths/Finance (25%), Science (13%), Arts (13%), IT/Digital (6%)
- Mainland China Next Generation on what they need to learn: Finance/Investments (59%), Leadership development / Soft skills (49%), Business model innovation (40%), Human resources / Talent management (28%), Digitisation/AI (23%)
Mainland China Next Generation
- China Mainland next generation are less involved in senior leadership role, board role, governance role, family council role, shareholder, beneficiary (vs Global)
- China Mainland next generation are more entrepreneurial, both outside family business, setting up new venture, or leading project in family businesses. (Vs Global)
- China Mainland next generation are more ready to take on senior leadership role or entrepreneur outside business (supported by family) compared to global
- Top 3 priorities for Mainland China Next Generation: Business growth (58%), New sectors or markets (23%), Asset allocation & investments (22%)
1) China Family Businesses & Family Office
Leaders in China Family Businesses (By Generation)
China private sector and family business has a short history, with economic development and opening up only in the next 1970s (50 years ago). Hurun China 500 Companies: Average lifespan is 25 years (Global: 28 years).
- Mainland China 2nd generation are currently leading the business (94%), compared to Hong Kong (61%), Global (51%)
- Only 6% of Mainland China 3rd generation are leading the business, compared to Hong Kong (30%), Global (51%)
- No 4th generation and 5th generation Mainland China leaders yet in family business
- Hong Kong and Global family businesses have similar percentage of the generation leading the family business.
2nd Generation Leading Family Business
- Mainland China – 94%
- Hong Kong – 61%
- Global – 51%
3rd Generation Leading Family Business
- Mainland China – 6%
- Hong Kong – 30%
- Global – 27%
4th Generation Leading Family Business
- Mainland China – NA
- Hong Kong -7%
- Global – 10%
5th Generation Leading Family Business
- Mainland China – NA
- Hong Kong -2%
- Global – 6%
China Business have a Family Office (Hong Kong, Global)
- Yes, Main business – 17% (30%, 17%)
- Yes, in addition to Family Business – 14% (30%, 25%)
- No – 60% (33%, 52%)
- Don’t know – 9% (7%, 6%)
31% of China business have a family office (Global: 42%) and 60% of Hong Kong business have a family office (Global: 42%)
Role in Mainland China Family Business, Family Office (Hong Kong, Global)
- Senior leadership role (management, executive director) – 46% (54%, 53%)
- Shareholder/beneficiary – 37% (43%, 42%)
- Entrepreneur outside business (supported by the family) – 29% (20%, 12%)
- Setup new venture / lead project in business – 20% (9%, 13%)
- Governance / Board role – 17% (4%, 30%)
- Employee/intern – 11% (22%, 18%)
- Other – NA (NA, 2%)
- Not engaged yet – 9% (13%, 12%)
China Mainland next generation are less involved in senior leadership role, board role, governance role, family council role, shareholder, beneficiary. But China Mainland next generation are more entrepreneurial, both outside family business, setting up new venture, or leading project in family businesses.
Target Role in Mainland China Family Business, Family Office in 5 Years (Hong Kong, Global)
In the next 5 years, Mainland China next generation would like to take on senior leadership roles or setup new ventures, 15% higher than global. Mainland China next generation are less interested to take on governance role.
Mainland China (Hong Kong, Global)
- Senior leadership role (management, executive director) – 69% (61%, 51%)
- Entrepreneur outside business (supported by the family) – 40% (24%, 25%)
2) Mainland China Next Generation Insights, Network, Education, Learning
Mainland China Next Generation who agree with the following statements (China, Global)
Mainland China Next Generation Find These Succession Issues Easy (China, Global)
Mainland China Next Generation education background (China, Global):
Mainland China Next Generation on what they need to learn (China, Global)
3) Mainland China Next Generation on Family Businesses
Impact of COVID-19 Pandemic China Mainland (Global)
With COVID-10 Pandemic China Mainland next generation are less active in family business and family office, compared to global next generation.
PwC: The current generation took control navigating the pandemic. While having veterans at the helm allowed the business survival strategy to be shaped by experience, the limited involvement of the NextGens likely resulted in missed opportunities.
PwC on Sustaining Family Legacy through 3 Dimensions:
- Business (the engine): Grow 10% every 2 – 3 years through organic growth, diversification or impact investing to serve the family interests. Develop the capabilities to drive digital transformation and capture opportunities in environmental, social and governance (ESG).
- Family: A united family, supported by a strong constitution and governance, supports growth. Establish a generational contract to bolster succession planning and sustainable transformation.
- Wealth: Adequate wealth reserves ensure that the family maintains or enhances its position. Family Offices can strengthen business prospects and foster asset diversification.
Top Priorities in the next 2 Years for Mainland China family businesses (Global)
Next Generation Involvement in the next 2 Years for Mainland China family businesses (Global)
Mainland China Next Generation preferred involvement in the future (Global)
Top 3 areas Mainland China Next Generation can add value the most, (Global)
Top 3 priorities for Mainland China Next Generation, (Global)
Mainland China Next Generation who agree with the following statements
Mainland China Next Generation on Sustainability / ESG
PwC’s Global NextGen Survey 2022
PwC’s Global NextGen Survey 2022 is an international market survey among next- generation members in family businesses. The goal of the survey is to get an understanding of what NextGens are thinking on the key issues of the day, what role they are playing and what roles they think they should play. The survey was conducted online in collaboration with The Family Business Network (FBN). There were 1,036 interviews in 68 territories, between 8 October and 12 December 2021. The China report focuses on the perspectives of 81 NextGen respondents in China. For the purposes of this report, ‘China’ refers to the People’s Republic of China, including Hong Kong SAR survey respondents.
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