The initial group of wealthy business people in China are beginning to retire. Is the next generation prepared to take over?

As the pioneers of Chinese entrepreneurship enter their twilight years, their businesses are facing challenges related to leadership transition and a changing commercial environment.

The passing of Zong Qinghou, once China's wealthiest individual, in February at the age of 79, sparked a rapid and intense struggle for control over his Hangzhou Wahaha Group. The ensuing conflict mirrored the plot of the popular HBO series, Succession.

Kelly Zong had to defend herself against opposition from others in Wahaha, in a complex conflict that kept the public in suspense for weeks.

The event highlighted the impending dilemma that China's business families are grappling with. The pioneer generation of Chinese entrepreneurs is now aging, and their offspring are faced with the intimidating responsibility of stepping into their parents' shoes – managing some of the globe's most prosperous businesses in the world's second biggest economy.

From 2017 to 2022, approximately 75% of the nation's family-run businesses have experienced problems with succession, as per studies conducted by a research group affiliated with the All-China Federation of Industry and Commerce.

Stock Connect's 10th Anniversary: Initiated with scribbles on a tablecloth – what does the next decade hold?

The trading connection between Shanghai and Hong Kong became operational on November 17, 2014.

The humble beginnings on the teahouse tablecloth have now transformed into a gateway for global investors to tap into China's US$10 trillion domestic stock market. Similarly, it also provides an opportunity for their mainland counterparts to broaden their investment horizons by dealing in stocks listed in Hong Kong.

The connection is particularly crucial as, unlike Hong Kong and other global developed markets, China's capital accounts are not completely accessible, with limitations on both incoming and outgoing security investments.

Despite several triumphs since 2014, investors wagering on Chinese stocks via the programme would have seen more financial gains had they invested in the S&P 500 in the last ten years. Additionally, the Stock Connect is confronting multiple challenges due to Donald Trump's re-election as US president.

The trading connection, activated on November 17, 2014, has surpassed the Qualified Foreign Institutional Investor (QFII) scheme, establishing itself as the main mechanism for international traders to access China's yuan-based stocks. The QFII program, launched in 2002 when China's market was starting to become globally accessible, necessitates extensive documentation and burdensome government authorizations before investments can be initiated.

Beijing is set to establish a 12-inch wafer fabrication facility, investing $4.6 billion in a government-supported chip initiative. Beijing Yandong Microelectronics is expected to hold a dominant role with a 25 percent share. Additional investors encompass display manufacturer, BOE Technology.

Beijing plans to invest 33 billion yuan (around US$4.6 billion) in constructing a 12-inch wafer fabrication plant. This project, spearheaded by state-run businesses and financial resources, signifies further progress in China's mission to enhance local semiconductor manufacturing.

Prominent companies participating in the new facility encompass Beijing Yandong Microelectronics (YDME), a firm listed on the Shanghai Star Market, and BOE Technology, the leading display producer in China.

On Saturday, YDME announced its plans to inject 4.99 billion yuan into Beijing Electronics IC Manufacturing, a subsidiary of the government-owned Beijing Electronics Holding responsible for the wafer fab project. As per a corporate document, this investment will grant YDME a dominant role in the project, possessing a 24.95% stake, backed by a cooperative agreement.

On the same day in a different report, BOE, listed in Shenzhen, revealed that they would contribute 2 billion yuan to gain a 10% share in the project.

Additional contributors encompass associates of Beijing Yizhuang Investment, Beijing State-owned Capital Operation and Management, and ZGC Group. Altogether, the stakeholders will chip in 20 billion yuan, while the rest of the funds will be procured through debt financing.

YDME indicated in its documentation that it anticipates China's combined circuit (IC) industry to expand its local production capacity to 21.2 per cent by 2026, a notable increase from 16.7 per cent in 2021. It also foresees a notable gap between supply and demand for mature nodes, particularly those with features sized 28 nanometres or larger, and a monthly production capacity of 370,000 wafers by 2027.

2024 Family Business Summit: Hong Kong meeting focuses on AI, global politics, and markets

Over the weekend, the exclusive 2024 Family Business Summit in Hong Kong saw a gathering of more than 100 business proprietors.

Over 100 of the globe's richest entrepreneurs convened in Hong Kong over the weekend, with the city intensifying its efforts to become the premier wealth management and family office center in the Asia-Pacific area.

Entrepreneurs from the United States, Europe, the Middle East, Southeast Asia, and mainland China converged with their colleagues in Hong Kong at the exclusive 2024 Family Business Summit. The event was coordinated by the South China Morning Post and Blue Pool Capital, with JPMorgan taking the lead as the main sponsor.

"Family enterprises serve as the pillar of Asia's economy and significantly contribute to the region's growth," stated the Post's CEO Catherine So at the Island Shangri-La Hotel.

"As a worldwide news company with a wealthy monthly readership of 35 million, we believe it's our duty to offer a unique platform for leading family business owners to interact and share knowledge with each other for the continued prosperity of these generational dynasties."

The private meeting, lasting one and a half days, commenced on Friday with a dinner at the Four Seasons Hotel. Attendees were indulged with a seven-course meal crafted by the triple Michelin-starred eatery, Lung King Heen.

The inaugural day of the conference was filled with dialogue sessions showcasing leading specialists in diverse domains, ranging from artificial intelligence to the South China Sea.

The cost of electric vehicle insurance in Hong Kong is expected to decrease, although third-party liability could stay elevated. As the prices of electric vehicles go down, insurance premiums are projected to follow suit. However, due to the frequency of accidents and the cost of repairs, third-party liability insurance is likely to stay high.

An industry executive has indicated that as the costs of electric vehicles (EVs) in Hong Kong decrease, the insurance premiums for these vehicles will also reduce. However, this might not necessarily result in a reduction in the cost of coverage for third-party liability.

Eric Hui, the CEO of Zurich Insurance in Hong Kong, advises EV owners in both China and Hong Kong to consider purchasing more than the minimum legally required insurance coverage in mainland China to match the standard in Hong Kong.

Full coverage auto insurance provides protection against third-party claims and pays for the policyholder's medical costs in the event of an accident. Additionally, it covers the cost of repairs, damages not caused by a collision, and theft.

According to legislation in Hong Kong, every car owner is legally required to have insurance that includes third-party liability coverage for a minimum of HK$100 million (US$12.8 million). In contrast, the legal requirement in mainland China is just 200,000 yuan (US$27,745). Typically, those who own older, less valuable cars choose to purchase only third-party coverage.

Geely intends to restructure Zeekr and Lynk divisions as the founder and investors withdraw $2 billion. Zeekr's value dropped by 24% in New York's market following the announcement of Geely Auto's restructuring strategy.

Geely Auto has consented to purchase an 11.3% share in Zeekr Intelligent Technology, which is listed on the New York Stock Exchange, at a cost of $806.1 million or $26.87 per share, as revealed in a stock market filing on Thursday. This acquisition will elevate its share to 62.8%. The entity selling is ultimately controlled by Li and his partners.

In a separate announcement, Zeekr revealed its plans to acquire a 50% share in the automobile manufacturer Lynk & Co. The deal, worth 9 billion yuan (approximately US$1.24 billion), will be purchased from two organizations connected to a prominent business magnate. Additionally, Zeekr plans to purchase more new shares in Lynk, increasing its ownership to 51%, which will subsequently reduce Geely Auto's stake to 49%.

Shares in Geely Auto dropped 5.2% to HK$13.18 last Friday, resulting in a significant loss of HK$7.3 billion (US$931.6 million) in its market valuation. Zeekr, which became publicly traded through a stock listing in May, saw a steep decline of 23.7% to US$22.24 in overnight trading in New York, trimming US$1.7 billion from its market cap.

According to their latest financial statements, Zeekr and Lynk continue to be in the red.

"Zeekr and Lynk have comparable product offerings and pricing structures, which will unavoidably result in [unwanted] rivalry, internal disputes, and capital wastage if not consolidated," stated Gui Shengyue, Geely Auto's CEO, during a profit report discussion on Thursday. "Inter-brand competition obstructs Geely's progress."

The purchase of Zeekr demonstrates the group's backing for the brand, according to a statement by Geely Auto. This move will streamline Zeekr's ownership framework, strengthen the group's sway over its business trajectory, and aid in the distribution of strategic resources and forthcoming plans, the statement further elaborated.

Li is restructuring his business empire based in Hangzhou, Zhejiang due to an over-supply in the market and fierce pricing competition among local EV manufacturers. Attempts to broaden his global reach have been hindered by heavy duties imposed on China-produced EVs in both the US and Europe. The win of Donald Trump in the US elections has increased the strain on Chinese exports.

Hong Kong shares end a six-day decline even with Chinese statistics on retail sales and housing prices

Despite a 4.8 percent increase in retail sales and a less rapid drop in housing prices, investor sentiment remained low.

The Hang Seng Index slightly dipped by 0.1 per cent to settle at 19,426.34, negating a potential rise of up to 0.9 per cent. Over the week, the main index suffered a 6.3 per cent decline, marking the largest drop in a month. Meanwhile, the Hang Seng Tech Index saw a marginal increase of 0.2 per cent.

Indices on the mainland also fell. The CSI 300 Index decreased by 1.8 per cent, and the Shanghai Composite Index went down by 1.5 per cent.

An earlier report issued by the agency on Friday indicated that the prices of new homes in 70 cities decreased by 0.5 per cent on a monthly basis in October, marking the smallest decrease in the past seven months.

The positive shift in economic figures has been overshadowed by Beijing's inability to sanction fiscal incentives aimed at enhancing consumption and employment during a legislative session last week. This is further complicated by the anticipated increase in tariffs by the incoming Trump administration. The Hang Seng Index has seen a 16 per cent decline from its peak in October. Initially, stocks had surged when Beijing implemented a variety of financial relief strategies and steps to support the real estate market, such as lowering mortgage rates, deed taxes, and removing restrictions on home purchases.

The decrease in China's new housing prices shows signs of slowing after 17 months, following the implementation of supportive measures. In October, the prices in 70 cities dropped for the 17th consecutive month, however, the rate of decline was slower, indicating that market stabilization might be due to these supportive actions.

The cost of new homes in China dropped for the 17th consecutive month in October, albeit at a reduced rate. This indicates that the capital, Beijing, might be nearing a point of market stability following a series of supportive interventions.

In 70 primary cities, the price of new homes saw a 0.5 per cent decrease from September, marking the most gradual drop in seven months, as revealed by the data put out by the National Bureau of Statistics on Friday.

The decrease in prices was 6.2 per cent compared to the previous year, a slightly steeper drop than the 6.1 per cent fall observed in September of the same year.

The prices in the four major cities – Beijing, Shanghai, Guangzhou, and Shenzhen – experienced a decrease of 0.2% in October on a monthly basis, which is less than the 0.5% drop observed in September, as indicated by the data.

Secondary cities like Tianjin, Wuhan, and Chengdu, along with tertiary cities such as Dali, Xuzhou, and Huizhou, experienced a 0.5% decrease in the cost of new homes last month, which is slightly less than the 0.7% reduction seen in September.

The average cost of previously owned houses in top-tier cities increased by 0.4% in October, following a 1.2% decrease in September. This marks an end to a 13-month downward trend.

In tier-2 cities, the cost of previously owned homes decreased by 0.4 percent, which is lower than the 0.9 percent decrease from the month before. Similarly, in tier-3 cities, the prices saw a decline of 0.5 percent, compared to a 0.7 percent drop in the preceding month.

US lawmakers have raised questions about Amazon's partnership with TikTok for e-commerce. Certain individuals perceive this alliance, which enables customers to purchase Amazon products directly via the ByteDance-controlled application, as a strategy to complicate the process of prohibiting TikTok.

In September, the Select Committee on China from the House called upon Amazon to converse about a notable retail collaboration that both the companies made public in August, as per several sources knowledgeable about the situation. This meeting has not been undisclosed before.

The group, tasked with handling assumed dangers from China's government, expressed worry about a prominent U.S. firm, integral to the economy, collaborating with a Chinese-owned business on the brink of prohibition due to national security issues.

"The Select Committee communicated to Amazon the risks and imprudence associated with collaborating with TikTok, citing the serious national security risks posed by the app," a representative for the Select Committee on China informed Bloomberg.

An Amazon representative communicated through email, stating "We, like numerous other American companies, keep ongoing dialogue with authorities at all tiers of government to talk about matters concerning policymakers, our staff, and our patrons." TikTok, on the other hand, did not furnish a reply to a request for their statement.

Lenovo is set to increase its worldwide manufacturing presence as AI boosts its second quarter sales. The top global PC manufacturer intends to establish additional factories outside China, in response to potential 60% tariffs threatened by incoming US President Trump.

Chairman Yang Yuanqing announced that Lenovo is set to broaden its supply chain and is planning to establish more production sites outside of China due to the unpredictable global political climate.

Lenovo, the leading global manufacturer of personal computers, owns the majority of its factories in China, a typical scenario in the electronics sector that exposes potential risks as US president-elect Donald Trump plans to levy a 60 per cent tax on imports from China.

Yang conveyed to Reuters that although it's premature to forecast the strategies of the new US government, Lenovo holds a superior position compared to its rivals when it comes to mitigating such uncertainties. This is due to its wider range of manufacturing sources and procurement tactics, as well as evenly distributed regional income sources.

Although China continues to be the primary production hub, Lenovo runs over 30 production plants across nine distinct markets. The firm intends to establish operations in Saudi Arabia as a result of a significant investment agreement with the kingdom's Public Investment Fund, according to Yang.

The tech firm from China announced a quarterly revenue of $17.9 billion as of September 30, surpassing the anticipated $16.0 billion as per the data from LSEG.

Hong Kong is set to release a retail infrastructure bond worth HK$20 billion, marking the second issuance in two months. The bond, with a duration of three years, guarantees a return rate of 3.5 per cent, distributed semi-annually.

Hong Kong is amassing HK$20 billion (US$2.7 billion) through its second issuance of retail infrastructure bonds, providing citizens with an additional opportunity to contribute to the city's growth.

The government announced on Friday that the three-year bonds will offer bi-annual interest payments. These payments will be determined by the average consumer price index rate during that time. However, they also provide a guaranteed minimum return of 3.5 per cent.

Financial Secretary Paul Chan Mo-po announced that the retail infrastructure bond is designed to offer citizens a secure and trustworthy investment opportunity. This bond promises consistent returns and gives investors a feeling of involvement and profit in backing infrastructure projects crucial for the long-term growth of Hong Kong.

"This release will also enhance the growth of the retail bond market and financial inclusivity."

Individuals with Hong Kong ID cards can start purchasing bonds, starting at a minimum of HK$10,000 and increasing in that scale, from banks, securities brokers, and the Hong Kong Securities Clearing Company. This will be possible from 9am on November 26 until 2pm on December 6. The bonds will be released on December 17 and will be available on the Hong Kong stock exchange the following day.

The administration could potentially raise the bond's capacity to a ceiling of HK$25 billion, depending on the reaction.

Hong Kong is striving to reach zero shipping emissions by 2050 via a green fuel program. The city is charting a course towards a more environmentally-friendly future, backed by incentives for green fuel usage and subsidies for vessels.

Hong Kong has revealed a strategy to advance green fuel refuelling, which is part of an effort to raise the city's position as a global maritime hub.

The strategy revealed on Friday states that Hong Kong's port will aim to cut its yearly carbon emissions from international shipping by a minimum of 20% by 2030, in relation to the levels of 2008, and by 70% by 2040. The ultimate goal is to achieve zero net carbon emissions from international shipping by the year 2050.

In order to realize its objectives, Hong Kong is planning to set up a reward program aimed at promoting businesses that initiate environmentally-friendly fuel bunkering operations. Additionally, it will provide financial assistance for the eco-friendly conversion of ships and foster expertise in this sector.

"Lam Sai-hung, the Secretary for Transport and Logistics, emphasized that Hong Kong needs to speed up the progression of eco-friendly marine fuel supply to promptly meet market needs. By doing so, it can boost its position as a fuel supply port and augment its standing as a global shipping hub."

In his 2023 policy speech, Hong Kong's Chief Executive, John Lee Ka-chiu, stated that the city plans to establish itself as a worldwide hub for green maritime fuel bunkering.