Chinese family businesses bullish about future
More than 70 percent of family businesses in China expect to see their businesses grow in 2021.
Chinese family businesses are more optimistic than their global peers about their growth prospects in 2021 and 2022, a recent study says, thanks to a positive economic-recovery trajectory and consumer sentiment in the home market.
About 73 percent of family businesses in China expect to see their businesses grow in 2021, compared with a global average of 65 percent. Among them, 89 percent expect to record growth in 2022 against a global average of 86 percent, according to PwC's Global Family Business Survey 2021.
The brighter sentiment is likely to have been buoyed by the strong economic recovery resulting from effective countrywide COVID-19 containment measures, policies guiding businesses to resume production, tax and fee reductions and exemptions, and central bank liquidity support.
The study covered 2,801 senior executives across 87 countries and regions, including 129 executives based in China's mainland and Hong Kong.
As many as 54 percent of family businesses in China had lower profits in 2020, and 27 percent said they need additional capital.
About 45 percent of family business respondents in China have developed a clear and documented roadmap for digital transformation, a higher proportion than the global average of 33 percent.
Globally, only 39 percent of respondents said their digital capabilities are strong, and 19 percent said their digital transformation is complete.
"As they develop, family businesses in China are more likely to bring in external management, expertise and funding to further commercialize their operations," said Rebecca Wang, PwC China Private Client Services Partner.
Chinese family businesses have identified key priorities, such as expansion into new segments, increasing investments in innovation and research and development, and introducing new products or services.
As many as 79 percent of Chinese family businesses say that sustainability is at the heart of everything they do.
The survey findings also show it is no longer enough to rely on values and legacies to propel their businesses forward. They now require new approaches such as digital transformation, prioritizing sustainability goals and professional family governance.
