Nine in 10 Chinese family business operators expect to report growth next year, PwC poll finds

About 89 per cent believe they could report growth in 2022, compared with 83 per cent in Hong Kong and 86 per cent globally, poll finds
Optimism among mainland family businesses would have a positive impact on Hong Kong too, PwC executive says

Banking & finance

Enoch Yiu

Published: 11:00am, 18 May 2021

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Nine out of 10 mainland Chinese family business operators expected to report growth next year, ahead of their counterparts in Hong Kong and globally, according to a survey by PwC.

About 89 per cent believed they could report growth in 2022, compared with 83 per cent in Hong Kong and 86 per cent globally. The survey, conducted every two years, polled more than 2,800 family business operators in 87 markets in the fourth quarter last year.

“The optimism of mainland Chinese family business operators was down to the better control of the outbreak, and China’s economy recovering faster than other markets,” said John Wong, PwC’s China and Hong Kong family business and private client services leader.

China’s economy almost came to a standstill in the first half of last year because of the Covid-19 pandemic. It, however, grew by 18.3 per cent year on year in the first quarter of 2021, its highest growth on record, government data shows. In comparison, Hong Kong’s economy grew 7.8 per cent, while the US economy expanded by 6.4 per cent in the same period.

Mainland operators were also more optimistic when it came to 2021 – 73 per cent expected growth this year, compared with 65 per cent globally and 53 per cent in Hong Kong. The IMF forecast in January that China’s economy would grow 8.1 per cent for the whole year, compared with 5.5 per cent growth for the global economy.

John Wong, PwC’s China and Hong Kong family business and private client services leader. Photo: Handout

The optimism among mainland Chinese family business operators would have a positive impact on Hong Kong too, Wong said.

“The city is an ideal location for wealthy mainland families looking to raise funds to expand their businesses and for overseas investment opportunities,” he said. The city has been crowned the world’s largest IPO market in seven out of the past 12 years. The upcoming Wealth Management Connect will also allow wealthy customers in China to access investment products sold in Hong Kong, Wong said.

The city could also attract family offices – companies set up to invest or handle charity and succession planning for wealthy families – from China, as well as the US and Europe, Wong added. “Family offices are normally set up close to where the families live, or to the location and market they want to invest in. European and US family offices that want to invest in Hong Kong would set up family offices in Hong Kong,” he said.

Hong Kong is an ideal location for wealthy mainland families looking to raise funds and for overseas investment opportunities, PwC’s John Wong says. Photo: AFP

The city was a natural choice for family business operators to go public, said Au King-lun, executive director of the Financial Services Development Council, a government advisory body set up for the strategic development of Hong Kong as a global financial centre.

“Hong Kong has a lot of private equity, banks, tax advisers and other professionals to serve these wealthy families,” Au said. He added that the Hong Kong government had since last year introduced a number of measures to promote the city as a global family office hub.

This article appeared in the South China Morning Post print edition as: Mainland family firms optimistic on growth

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