Second-gen entrepreneurs take up family biz batons

NINGBO — When Ye Kaifeng, a Ningbo native, returned home in 2004 after studying abroad, he was initially reluctant to step into his father's shoes and take over the family papermaking business. Instead, he started his own hog-raising enterprise.

"As a returned overseas student, I believed I should do something different, suspecting that I wouldn't make any difference to my family or the papermaking industry," Ye said.

It took him over a decade to come to terms with failing to take the baton from his father's hands in 2018. Then, Ye was already a successful entrepreneur in the eco-breeding business.

The challenge of management transition is widely shared by tens of thousands of private enterprises in Cixi, a county-level city under the administration of Ningbo, Zhejiang province — with over 1.8 million residents and roughly 60,000 private enterprises.

It is also a common problem facing the country's bustling economic hubs where the management transition of family enterprises holds implications for regional economic prospects. Many second-generation entrepreneurs have risen to the challenge of maintaining continuity while seeking innovation.

Transition

The majority of private enterprises in Cixi were founded following China's reform and opening-up. Among them, over 2,000 are manufacturers of small home appliances. As the founding entrepreneurs have come to retirement age in recent years, a transition is inevitable.

Passing the baton to heirs is the most common choice in 95 percent of all cases in Cixi. Private enterprises have exhibited a great deal of prudence with the transition, which usually takes years.

Among 418 private enterprises with an output value exceeding 100 million yuan ($13.9 million) in Cixi, 146 companies — or 35 percent of the total — have been completely or largely taken over by second-generation owners. About 200, or 48 percent, are still in the midst of transition, according to data from local authorities.