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Cover Story
Print Edition> Cover Story
UPDATED: April 23, 2012 NO. 17 APRIL 26, 2012
Who's Next?
China's private entrepreneurs struggle to hand their companies over to the second generation
By Yuan Yuan
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China's private entrepreneurs struggle to hand their companies over to the second generation (CFP)

This is the second time Zuo Ying has been called back to China to help with her father's business, Zongshen Industrial Group based in Chongqing in southwest China.

With more than 13,000 employees and total assets exceeding 4 billion yuan ($635 million), Zongshen Industrial Group is China's leading private enterprise manufacturing products related to motorcycles. Zuo Ying's father Zuo Zongshen is the founder and chairman of the company. Starting from scratch as a motorcycle repairman in the 1980s, Zuo Zongshen worked extremely hard and eventually turned his motorcycle repair stand into a multi-million-dollar company.

Zuo Ying was born in 1982. From a young age, she was told she would take over her father's position and that the livelihood of the company's employees would depend on her.

"It is a lot of pressure for a 10-year-old girl and I felt more stress than excitement," said Zuo Ying, who attended the University of Miami in the United States after she graduated from an exclusive high school in Chongqing.

Zuo Zongshen made this education plan after consulting experts' opinion on how to educate his daughter so she could successfully take over his position in the future.

However, this well thought-out education plan didn't quite achieve the desired results. Unlike her father, who prefers to stay in Chongqing and is generally serious and conservative, Zuo Ying travels around the world and posts sexy pictures of herself on China's popular micro-blogging site Weibo.com.

In 2007, when the daughter graduated with a bachelor's degree in business administration in the United States, the father asked her to come back to China to help with the business. Zuo Ying was keen to stay in Miami but she finally agreed to come back under considerable pressure from her father. On her return, she was appointed his assistant.

In the following year, the duo found many differences between them. The father's office was filled with reports, and he often shuffled back and forth between meetings. The daughter struggled to understand why her father had to deal with every little problem by himself while the father failed to understand why his daughter spent most of the day staring at the computer screen.

"For him, staring at the computer screen is a waste of time," said Zuo Ying. "But how can a modern business run without the Internet and computers?"

Zuo Ying's spontaneous and unguarded speech in front of political officials was also seen as inappropriate by her father. "These interpersonal relationships are so complicated and there is a lot of guesswork in communication," complained Zuo Ying, who decided to go back to Miami after one year on the pretext that she couldn't bear Chongqing's cold winters.

In 2009, as the Zongshen Group suffered from the financial crisis and witnessed a sharp fall in the export volume of its motorcycles, the father called the daughter back and asked her to take over Zongshen Import & Export Corp., the subsidiary company that was suffering the most.

This time the father-daughter partnership worked out better. Zuo Ying expanded the scope of the business and Zuo Zongshen began investing in other industries such as real estate to cater to his daughter's interests, and also encouraged her to invest in projects separate from the Zongshen Group. In 2011, Zuo Ying invested 350 million yuan ($55 million) in a BMW 4S store. She had succeeded in expanding the export volumes of the subsidiary by 50 percent by the end of 2011. Finally, the father felt the daughter had become more mature.

But Zuo Ying still flies back to Miami every few months to get away from Changing's climate and pollution. "I have more friends in Miami," she said. Her ideal life is said to be traveling around the world with her American husband and making money by trading stocks. However, she is obliged to help her father run his business.

Zuo Zongshen once tried to introduce professional managers to his company, but "since the system of professional managers has not developed to an ideal level in China, it is still not the best way to deal with it," he said.

Zuo Ying prefers to discuss business with her father and uncles instead of the managers employed by her father. "People from the same family are more reliable," she said.

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