China has a problem with family businesses: a sizeable number are preparing to hand over control to the next generation. However — in a development that some say will hurt and others think might help the world’s second-biggest economy — some may not stay in business at all.

More than half of the children of the wave of entrepreneurs that built China’s export economy after former leader Deng Xiaoping opened the Communist nation to free market capitalism in 1979 do not want to succeed their parents as bosses of their family firms, surveys and academic studies suggest. Instead, they would rather work for themselves or in fashionable industries such as banking, investment and technology.

“What China is facing is a big social and economic loss,” says Joseph Fan, co-director of the centre for economics and finance at the Chinese University of Hong Kong. “A lot of productive business will stop,” adds Prof Fan who estimates that founder-run businesses contribute over half of China’s GDP, with much of the rest of the economy comprised of state-owned enterprises.