Rich business scions in Foshan finish 'controversial' six-month training with state-owned firms

Fears raised over whether entrepreneurs who will inherit parents' business will adopt 'bureaucratic' practices

PUBLISHED : Wednesday, 28 May, 2014, 5:33pm
UPDATED : Thursday, 29 May, 2014, 5:15pm

The scions of wealthy Foshan executives have recently completed training under Chinese state-owned enterprises, as the local government aims to ensure a next generation of entrepreneurs can continue keeping the city’s economy humming.

However, the so-called SOE training programme has come under criticism, with some observers questioning why they should be trained by bureaucratic state firms and why the local government is being involved in private companies’ dynastic successions.

Forty-eight people in Foshan, a key manufacturing hub in Guangdong province, were chosen from 100 candidates to take part in the newly launched on-the-job training programme, which ran for six months from November. 

When I returned to the mainland, I felt I was not accustomed. My father told me that someone like me can’t survive in the domestic market
Feng Zhijun, general manager

The trainees were all in their 20s or 30s. More than half of the total figure were second-generation company figures while the rest had already set up their own businesses. 

An official from the Foshan Communist Party Organising Department, in charge of hiring and promotions, said the programme was in part designed to encourage the sons and daughters of businesspeople to grow capital in China instead of abroad.

“It is a common phenomenon that the rich second-generation don’t have a faith, don’t have a sense of mission and are inclined to emigrate,” the official, who refused to be named, said.

Some of the trainees said they learned the ropes of doing business mainland-style after years overseas.

“When I returned to the mainland, I felt I was not accustomed. I [wasn’t in the habit of] greeting senior officials,” said Feng Zhijun, 34, who had lived abroad for 10 years and is now general manager of Foshan Guangnan Asphalt Corporation.

“My father told me that someone like me can’t survive in the domestic market.”

Feng said he returned home at the behest of his father, who founded the firm and is currently its chairman. Under the training scheme, Feng Zhijun worked with the municipal Road and Bridge Construction Company, affiliated with China’s state-run infrastructure giant CRBC.

Feng said he was able to expand his network base and “also studied the Communist Party Constitution and joined mass-line education activities”.

Liu Yuanxin, vice-director of the Foshan organising department, told Xinhua that private enterprises in the city were “at a critical moment” in ensuring succession. Private businesses account for more than 60 per cent of Foshan’s gross domestic product each year.

Yet a government survey showed that out of 812 business scions, one-fifth had foreign passports and nearly 80 per cent were not Communist Party members.

“If [we don’t] strengthen their education, it’s likely that capital and talents will flow out of the country. It’s also impossible for them to take up social responsibilities,” Liu said.

Liu said more than 100 applicants want to join the programme’s second round, even if trainees are unpaid.

But commentators quoted in social media and local news reports have voiced concern the trainees would perpetuate the red tape and opacity of state-owned enterprises, which dominate most Chinese industries, from construction to electricity and mining.

They might adopt SOE habits like “low efficiency and using their monopoly status to force preferential polices”, commentators said.

However, Liu said they would cease the training programme if it is unsuccessful.

Jiangsu province – another economic power base – launched an initiative in 2009 to “incubate” 1,000 business scions by sending them to Communist Party Schools or assigning party officials or leading businessmen to mentor them, according to the People’s Daily.

Xinhua said the programme was "unsuccessful" due to controversy, without elaborating.



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