‘Second generation of fa888 slotctor888 slot ccy owners’ set to fuel industrial upgrade, digitalization888slot

Workers rush to complete orders at Luo Yukang's factory in Yiwu,<strong>888 slot cc</strong> East China's Zhejiang Province. Photo: Li Hao/GT

Workers rush to complete orders at Luo Yukang's factory in Yiwu, East China's Zhejiang Province. Photo: Li Hao/GT

When the Global Times visited a local decoration factory in Yiwu, East China's Zhejiang Province in early December, Luo Yukang was in his office, busily reviewing new orders. Luo's parents set up the factory about 30 years ago, at a time when China's private economy was on its ascent and the manufacturing sector was about to take off. 

Luo, 27, joined the company in 2019, after graduating from Boston University. He is now in charge of the company's e-commerce strategy and products design, in preparation for "inheriting" the family business when his parents decide to retire.

Being a young boss was not Luo's first career choice. He originally planned to work in first-tier cities like Beijing and Shanghai, to gain more professional experiences. But he later abandoned his plan due to a number of factors, including strict anti-COVID restrictive measures.

Luo's knowledge and vision is expected to provide new impetus into the family business. After intensive study, he set up the e-commerce branch, which had become an important driver for the company's sales expansion amid the pandemic and now continues to draw more business customers. 

Luo, like thousands of his peers across China, are colloquially known as "chang er dai," meaning the "second generation of factory owners."

Young factory owners

Thanks to the efforts of their parents - the first generation of private entrepreneurs, they have helped China to climb up the competitiveness ladder in manufacturing and earned China the laurel as the world's top factory. Now, their children leading a wave of high-tech innovation exemplifies the country's industrial prowess. 

According to these young bosses, the external environment has changed drastically compared to three decades ago when their parents embarked on the family businesses. They need to overcome challenges head-on with more innovative ways in order to win in the fiercer market competition.

"In our parents' era, if you got a score of 70 out of 100, you were in a position to make a profit. But now one has to score 90 or more in order to prevail in the market," Luo told the Global Times.

During interviews with the Global Times, one of the common challenges the "second generation of factory owners" list is the competition in labor-intensive manufacturing, especially from Southeast Asia. And, difficulties in hiring young workers persist, raising the urgency for factories to adopt automatization to ramp up productivity.

"Chinese exports face pressure this year amid a global economic downturn, and goods from Southeast Asia are often cheaper than those produced in China, [resulting in more competition]," Lou Donglai told the Global Times. He is the youngest son of Lou Zhongping, known as "China's straw king."

Lou Donglai, after receiving a master degree from Oxford University, had worked in his family business in Yiwu for sometime in 2020. During his apprenticeship, he helped expand the company's product line-up, including cups, bows and plates, offering customers with what he described as "one-stop" purchase. He also brought in a mask order from the Spanish government, thanks to his past work experiences at the United Nations. That year, young Lou's innovative ideas generated 100 million yuan in new company sales.

Lou Donglai's overseas education has given him a new edge. 

"Dealing with our foreign clients requires more comprehensive marketing skills, such as professional ways to negotiate and persuade clients that 'even if our price is high, you could still buy high-quality goods from me," Lou said.

As to the US' "de-risking" push that aims to squeeze China out of global supply chains, many young factory owners are fighting back, the Global Times learned. 

"Some foreign companies have ceased cooperation with us due to external factors, so we decided to develop our business in other markets. We have good and inexpensive goods, so I'm confident that customers will continue to choose us," Huang Yin told the Global Times.

Huang, whose husband is a "chang er dai," left her job in artificial intelligence in Shanghai several years ago and now co-manages a foundry factory with her husband in Dalian, Northeast China's Liaoning Province. 

Digitalization helps

The digital-savvy young business managers tend to leverage social-media platforms to promote their sales. According to Huang, they're also seeking to build localized sales teams in overseas markets, in order to speed up overseas business expansion. 

"I believe that digitalization provides us with a shortcut for 'made in China' goods to overtake foreign rivals," Huang said. 

According to a report by Reuters, it is estimated that roughly 45,000 to 100,000 of "chang er dai" new generation of factory managers are preparing to take over one-third of privately-run enterprises in China.

Observers said that at a time when the first generation of private entrepreneurs are reaching their retirement age, the emergence of the young generation, with fresh thinking and more innovative ideas, could act as a competent force propelling the country's manufacturing upgrade.

China has worked out a series of measures this year to boost the development of manufacturing, the private economy in particular. In November, China's central bank and other government agencies announced 25 measures to boost financial support for the country's private sector, including efforts to shore up financing of private businesses.

Lan Qingxin, a professor from the University of International Business and Economics, told the Global Times that ensuring a smooth family business transition from the first generation to the second one will be a crucial part of China's manufacturing sector upgrade. 

"As external uncertainties remain and market competition heats up, business owners need to have a better understanding of the operation of the digital economy," Lan said. 

According to Lan, China's second generation of private business owners are better educated than their parents, armed with an international perspective, and are familiar with modern management concepts. So their taking over the steering of factory operation is "a positive" for China's manufacturing sector to develop in depth and get stronger.
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