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Home » Opinion » Chinese Views
Training for the rich, or a wise investment?
Source: Xinhua |
August 27, 2009, Thursday
|
Print Edition
Print Edition
A program to train the successors of major private business tycoons in east China's booming Jiangsu Province has sparked debate on whether it is an abuse of government resources.
The program is designed to equip 1,000 potential leaders of private businesses with management ability and entrepreneurial virtues, half of whom are successors of major family-owned companies, said a spokesman with the Organization Department of Jiangsu Provincial Committee of the Communist Party of China, which initiated the training.
"Why did the government offer training for rich youngsters, while ignoring those born into impoverished families? It is not fair," said netizen "csd" on an online forum at Xinhuanet.com on Tuesday.
"There may be possible corruption in future, because the training would make the relations between those would-be bosses and the government more intimate," said netizen "Yuweng" from Shanghai.
"Is it legitimate to use public funds to serve private businesses?" asked netizen "kaiser".
Public concern also emerged over the government's interference in the operation of private business. "The direct involvement of the government would not enhance the competitiveness of the private businesses, but make them more reliant on the government," Yangtze Daily said in an editorial.
The rapid development of private businesses, including family-owned companies, has greatly boosted the local economy. They have also served as major contributors to China's GDP (gross domestic product), said the spokesman.
"Their successors' performance would not only determine the future of their businesses, but also have a major impact on the country's economy," he said in response to the doubts. "That's why we decided to kick off a training program to teach them how to be responsible business leaders."
The cost of the training only accounts for a small part of the total budget on human resources training, he added. Over the next two years, about 1,000 trainees will attend the training program to strengthen their loyalty to the country and improve management skills via working in state-owned enterprises.
China now has more than 6.8 million private businesses, of which 80 percent are family-owned, according to the State Administration For Industry and Commerce. The number of private companies in Jiangsu is 12.4 percent of the total, ranking first in the eight years up to 2008, it said.
According to Chinese tradition, many private business owners would like to transfer their positions to their offspring or relatives.
Most private businesses in Jiangsu were transformed from state-owned enterprises, and their owners have always been diligent and displayed a strong sense of social responsibility.
"Perseverance and a sense of social responsibility are exactly what our younger generation lacks," the spokesman said.
The plan has been warmly welcomed by the entrepreneurs and their successors. According to a survey of 250 major and 100 fast-growing private businesses, 85.4 percent of owners' offspring and other relatives were willing to participate in the training program.
"Maybe I know a lot of theories about business management, but lack real experience," said Gao Xiaodong, one of first batch of 50 trainees.
Gao recently obtained an MBA diploma in the US and replaced his father as CEO of China's largest down coat brand, Bosideng. "Besides, I will also learn some valuable qualities from our elders, such as passion, courage and perseverance."
"The government's plan to cultivate our successors is very helpful," said an owner of a steel company surnamed Zhu in Nanjing, the provincial capital. "I have been striving for my business for more than 20 years, and I have decided to transfer my power to my son," Zhu said. "But I think he is not capable of taking the lead yet." Zhu said he was content with the training plan, and had signed his son up for it.
Many of China's early private business owners are in their 50s and 60s, and it's the right time for them to designate and cultivate their successors.
Hu Run, Forbes' business magazine's China chief researcher, predicted in 2005 that the transfer of China's private wealth from the first group of entrepreneurs to the second generation would reach a peak in 10 to 20 years.
Research by McKinsey, a consultancy company, showed that the survival rates of family-owned businesses worldwide dropped drastically after the founding generation.
"A global view showed that only about 30 percent of family-owned businesses last to the second generation, and only about 17 percent survive to the third," said TC Chu, a director at the McKinsey office in Hong Kong.
"Chinese private businesses are characterized by lavish family involvement," said Liu Chuanzhi, board chairman of China's Lenovo Group. "If they want to be long-living giants, they should separate the management rights from the ownership. Only those capable can be the leaders."
The program is designed to equip 1,000 potential leaders of private businesses with management ability and entrepreneurial virtues, half of whom are successors of major family-owned companies, said a spokesman with the Organization Department of Jiangsu Provincial Committee of the Communist Party of China, which initiated the training.
"Why did the government offer training for rich youngsters, while ignoring those born into impoverished families? It is not fair," said netizen "csd" on an online forum at Xinhuanet.com on Tuesday.
"There may be possible corruption in future, because the training would make the relations between those would-be bosses and the government more intimate," said netizen "Yuweng" from Shanghai.
"Is it legitimate to use public funds to serve private businesses?" asked netizen "kaiser".
Public concern also emerged over the government's interference in the operation of private business. "The direct involvement of the government would not enhance the competitiveness of the private businesses, but make them more reliant on the government," Yangtze Daily said in an editorial.
The rapid development of private businesses, including family-owned companies, has greatly boosted the local economy. They have also served as major contributors to China's GDP (gross domestic product), said the spokesman.
"Their successors' performance would not only determine the future of their businesses, but also have a major impact on the country's economy," he said in response to the doubts. "That's why we decided to kick off a training program to teach them how to be responsible business leaders."
The cost of the training only accounts for a small part of the total budget on human resources training, he added. Over the next two years, about 1,000 trainees will attend the training program to strengthen their loyalty to the country and improve management skills via working in state-owned enterprises.
China now has more than 6.8 million private businesses, of which 80 percent are family-owned, according to the State Administration For Industry and Commerce. The number of private companies in Jiangsu is 12.4 percent of the total, ranking first in the eight years up to 2008, it said.
According to Chinese tradition, many private business owners would like to transfer their positions to their offspring or relatives.
Most private businesses in Jiangsu were transformed from state-owned enterprises, and their owners have always been diligent and displayed a strong sense of social responsibility.
"Perseverance and a sense of social responsibility are exactly what our younger generation lacks," the spokesman said.
The plan has been warmly welcomed by the entrepreneurs and their successors. According to a survey of 250 major and 100 fast-growing private businesses, 85.4 percent of owners' offspring and other relatives were willing to participate in the training program.
"Maybe I know a lot of theories about business management, but lack real experience," said Gao Xiaodong, one of first batch of 50 trainees.
Gao recently obtained an MBA diploma in the US and replaced his father as CEO of China's largest down coat brand, Bosideng. "Besides, I will also learn some valuable qualities from our elders, such as passion, courage and perseverance."
"The government's plan to cultivate our successors is very helpful," said an owner of a steel company surnamed Zhu in Nanjing, the provincial capital. "I have been striving for my business for more than 20 years, and I have decided to transfer my power to my son," Zhu said. "But I think he is not capable of taking the lead yet." Zhu said he was content with the training plan, and had signed his son up for it.
Many of China's early private business owners are in their 50s and 60s, and it's the right time for them to designate and cultivate their successors.
Hu Run, Forbes' business magazine's China chief researcher, predicted in 2005 that the transfer of China's private wealth from the first group of entrepreneurs to the second generation would reach a peak in 10 to 20 years.
Research by McKinsey, a consultancy company, showed that the survival rates of family-owned businesses worldwide dropped drastically after the founding generation.
"A global view showed that only about 30 percent of family-owned businesses last to the second generation, and only about 17 percent survive to the third," said TC Chu, a director at the McKinsey office in Hong Kong.
"Chinese private businesses are characterized by lavish family involvement," said Liu Chuanzhi, board chairman of China's Lenovo Group. "If they want to be long-living giants, they should separate the management rights from the ownership. Only those capable can be the leaders."
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