China’s factory heirs describe the difficulty of taking over family businesses

China’s family-factory succession challenges are illustrated by new Guardian interviews published on 7 October with heirs to businesses in Wenzhou and Shanwei. Their accounts describe how transferring ownership can leave unresolved the harder task of passing on commercial relationships, experience and responsibility for running a company.

The reporting by Danny Vincent, with additional reporting by Yu-chen Li, follows two prospective successors and includes an academic’s assessment of the difficulties. It offers a close view of their concerns, without establishing how widespread reluctance is among heirs or whether failed handovers are increasing nationally.

Wenzhou’s family networks and the limits of inheritance

Ayu, identified only by his given name in the Guardian, recalled watching his parents make leather shoes on the ground floor of their three-storey home in Wenzhou during the 1980s. The workshop subsequently became a factory employing 700 people, although the report does not specify when it reached that size.

Relatives in Europe sent the family photographs of Italian designer products to inform its designs. Those overseas connections were part of this business’s development. The Guardian describes the wider historical Wenzhou model as small companies using family finance and underground factories to produce inexpensive goods, a pattern economists had named by the mid-1980s.

He also described the risk of inheriting formal control while employees were already leaving. That was his account of a possible succession problem, rather than evidence of a national staffing trend. “We inherited the wealth, but we couldn’t inherit the industry,” he told the newspaper.

Hanqing Fang, identified in the report as an associate professor at Missouri University of Science and Technology, explained why that distinction matters. “Shares can be passed to a son or daughter overnight,” he told the Guardian. The founder’s experience, instincts and personal relationships are harder to transfer.

Fang warned that a handover can lose capabilities embedded in the founder, including knowhow and supplier networks. His assessment identifies a mechanism through which succession could damage a business; it does not quantify losses across Chinese manufacturing.

A Shanwei factory heir weighs the responsibilities

Wu, also identified only by his given name, works in marketing in Hong Kong. His family owns a snack-processing factory in Shanwei and dozens of stores in Shenzhen and Hong Kong, according to the Guardian. He described reluctance to take over because of the interpersonal relationships and financial connections he would need to understand.

Paperwork and doubts about his own ability to handle the responsibilities also shape his thinking. Wu has not ruled out eventually taking control, but the report gives no timetable. “I’m not ready yet, because it’s not easy,” he said. Neither his eventual decision nor a scheduled handover is established.

What HSBC’s legacy-planning survey measures

Separate background comes from HSBC Life’s HNW Legacy Planning report, whose first edition was published in March 2026. Ipsos Asia conducted its online-panel survey between 22 September and 18 October 2025. It covered 908 people across nine markets, including 102 in mainland China.

Participants had at least US$2 million in investable assets and made their own financial decisions. Among mainland respondents, 36% had a formal legacy plan, 48% were gathering information or planning, and 16% had not started but were considering it. Together, 64% lacked a formal plan, compared with 41% having formal plans across all surveyed markets.

Those findings concern wealthy survey participants, not all Chinese people or a representative census of family factories. Formal wealth-transfer planning also differs from preparing someone to operate a manufacturing business. HSBC sells insurance, and the report promotes insurance’s role in wealth transfer, a commercial interest relevant to reading its findings.

Business outcomes remain unmeasured

The Guardian interviews and HSBC survey document concerns and planning gaps, but establish no national total of factory closures, lost jobs or GDP damage attributable to failed succession. Neither announces a new policy response. The open question for the families described is how, and whether, the next generation will assume operational responsibility.