Raphael Amit, a professor of management at Wharton School at the University of Pennsylvania, said that the older generation needs to be open to the innovative ways of doing business these days, something that the younger ones are more familiar with given that most of them are educated overseas and have a more global perspective.

“Family business owners also need to balance multiple goals including preservation and growth of financial capital, and most importantly to focus on managing the asset diversely to ensure a smoothing succession,” said Amit.

Like Pan, Yu Jiangbo has also taken his company global. The general manager of Zhejiang Neoglory Jewelry has been in the family business since 2008 and was responsible for helping the company find business partners all over the world, some of which include brands such as Zara, H&M and Accessorize.

The company had also opened stores in the United Kingdom, United States and Dubai, and set up an e-commerce platform for their fashion accessories.

“I am going to run the company my own way, focusing on brand building and online platform expansion with a long term perspective,” said Yu. “I had to convince my mother that we shouldn’t just be a manufacturer.”

Wealth management

Another important aspect of a successful inter-generation business handover is the management of wealth. A CEIBS white paper on this particular topic was released at the July 11 forum and it explores the investment needs, risk diversification, cross-border assets and inherited wealth of Chinese business owners with assets above 10 million yuan ($1.6 million).

“Private-owned enterprises in China have not only created jobs for over 60 percent of the population, but they have also made great fortunes, which have to be managed well,” said Rui Meng, co-director of CEIBS Center for Family Heritage.

“We expect these wealthy families to hand down their assets in a planned manner, with help from a specialized agency to boost the family business development rather than let it languish unproductively,” he added.

But not everyone is deferring to the professionals. The white paper revealed that more than half of the family businesses polled still manage their wealth themselves, preferring to trust their kin.

However, 40.2 percent of businesses still turn to a reliable wealth management agency, such as banks and securities companies for asset management. Within this group of families, 68.9 percent of them opt for an overseas trust agency and 83.7 percent of them use this as their main investment method.