According to findings from PwC's biennial global survey of family businesses: The 'Missing Middle': Bridging the strategy gap in family firms , 64% of family businesses have grown over the past year globally, despite economic uncertainty. Family businesses in Asia Pacific are the most ambitious, with 21% looking for the quickest and most aggressive growth, compared to Europe (10%), North America (12%) and global businesses (15%).
This overview presents the key highlights from China and Hong Kong. The survey results show that as the Chinese economy experiences a transformation from the previous state-led manufacturing-based model to a new one driven by consumer demand and the service sector, the manufacturing-based family businesses that flourished in a previous era are having to find new avenues of growth. For example, the proportion of HK family businesses who have seen sales growth over the last financial year have remained consistent however, compared to 2014, the proportion of mainland Chinese family businesses who have seen sales growth in 2016 dropped 11 percent compared to 2014. Compared to survey results two years ago, there is an upward trend in proportion of family businesses whose aim is to grow steadily versus aggressively.
Among those Chinese family businesses expecting to grow by 10% or more, the vast majority (93%) will use external financing to help fund this growth compared to the global average of 78%. In Hong Kong, growing core business in existing markets is the key means of achieving growth for 85% of the surveyed family businesses; around half plan to enter new markets.
Succession planning continues to be weak as only 10% of family businesses in China and Hong Kong have a robust, documented and communicated succession plan in place. This is lower than the global average of 15% but higher than the average in 2014. There is an upward trend in family businesses in both China and Hong Kong who are inclined to pass on ownership but bring professional management into the firm compared to 2014. Download our report to learn more about how family businesses in China and Hong Kong are navigating challenges such as internationalisation, aligning between family and business goals, managing differences, what their priorities might be, and how responsive they might be to new trends and influences to ensure their competitiveness and preservation of their wealth.
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