Wu Guangqiang

    A SENSATIONAL piece of news has been around since the end of the Spring Festival, though it remains unverified.

    Shi Yinyin, son of a superrich jeweler in Wuxi, Jiangsu Province, is said to have lost 1.5 billion yuan (US$229 million) in a Macao casino overnight. The crazy gambling has left him broken and he has vanished. Photos from Web sites showed that some jewelry stores belonging to the Shi family were closed.

    The same person made headlines one year ago with his extravagant wedding, in which a fleet of luxurious limousines cruised through the main streets of Wuxi.

    Such an outrageous occurrence — which only appeared in a soap opera before — displays an issue looming ahead for the Chinese nouveau riche. Can fuerdai, or the second generation of the new rich, successfully carry on their parents’ wealth without losing it?

    Three decades’ economic boom has given birth to a fast-growing legion of private entrepreneurs, many of whom have amassed huge fortune through their hard work and ingenious management. Data show that China has over 9 million registered private businesses. Many successful owners went from rags to riches and they constitute China’s first generation of the rich since the founding of the PRC.

    Nevertheless, they are now put to a severe test: making their offspring qualified successors. This is a brand-new issue in contemporary China and a tough challenge for both private business owners and society.

    Business succession is a universally thorny problem. In the West, there’s a saying that the first generation builds the business, the second makes it a success, and the third wrecks it. In the same vein, in China, there has been a spell claiming that a family’s wealth can hardly pass on to the third generation.

    Myriad cases — old and new — have proved and are proving the charm of the spell. Shi Yinyin’s is just a new addition.

    In my opinion, the root of the problem chiefly lies with the parents. The majority of the Chinese people had lived in penury for generations. Thanks to the reform and opening-up policy, they endured hardship and started business from scratch and won “glorious” wealth.

    Driven by a mixture of a compensation mentality and a lack of experience in bringing up offspring, they tended to spoil their children rather than give them proper training. Not wanting their children to repeat their early poor life, they feed and clothe their beloved ones with anything that can show their care and status. They also try hard to shield the children from any risk or hardship. As a result, some spoiled fuerdai draw intense public aversion with their lavish way of life and contempt for morals. They have whirlwind driving in their sports cars; they go overseas on shopping sprees; and some even fall for drug abuse. The only thing they may not know is how to run a business; their parents have failed to give them the most important thing.

    To mend the fold, some anxious parents are turning to experts for help. Some prestigious universities and private consultancies are offering specially designed courses to groom these young heirs. Unfortunately, most of the attendees doze off during the lectures, though their parents paid through the nose for those courses. A recent survey disclosed that in China, 3 million private businesses will face management handover, but only a small percentage of their heirs are willing or qualified to be a successor. Only 30 percent of the power transfer cases are successful.

    Failure may come in many forms. But a look at how Western billionaires endeavor to cultivate their next generations may be helpful.

    An elite church school in Washington, the United States, carries its school motto as turning students into “persons for others.” Like this school, almost all other American schools taking rich children place a premium on serving communities. Warren Buffett, one of the richest persons in the world, left his children a small sum of money in comparison with his huge wealth. His son Peter Buffett became a musician rather than took over his father’s business empire.

    It may take a long time for Chinese well-to-dos to learn the ropes of teaching their children to carry on their business for the welfare of the nation as well as their own families.

    (The author is an English tutor and a freelance writer. He can be reached at jw368@163.com.)